African-Americans need to understand the only way to establish true economic empowerment in our urban communities is to create a free market economy. Right now, the black community is structured as a planned economy where central planning is employed to handout government grants, social security checks, Section 8 and SNAP and WIC, or non-profits looking for grant money and working class committed to 20-hour to 40-hour/week employment.
The solution to black economic empowerment is to establish a trading market exchange system allowing the black community to do business directly with each other by trading assets and setting prices using a trusted exchange. We covered the solution in detail in a previous article and recommend you read the article if you have not done so already: http://dreamandhustle.com/2016/07/how-african-americans-can-establish-a-free-market-economy-in-the-hood-by-developing-a-blockchain-powered-exchange-platform/
The problem is the black community simply does not have a true trading market exchange established outside of the prison industrial complex where cats inside trade stuff from the commissary or contraband to each other. Many of the cats who bumping their gums claiming to be on the forefront of the black economic movement does not have the STEM skills or background to create a trading market exchange which is the only real solution – everything else is a jive hustle to buy a book or DVD – the black community just need a market exchange system. Only the Afro-Tech have the skills and capability to create an unprecedented market exchange system to recalibrate the black community as a market economy.
This article is not going to repeat the information from the previous article on how and why we need a stock market exchange – read the previous article. What this article is going to do is show you what never been taught to us African-Americans before and that is how a stock market or a trading market actually works. I’m going to show you how the order matching component works and will discuss how I’m using bots to facilitate processing the trade tickets and prioritizing the orders to buy and sell because this is important.
As a member of the Afro-Tech who actually build the exchange markets, let me tell you something – nothing is more exciting, fun and awesome in STEM, finance, economics, empowerment or as a cat from the West Side of Chicago than knowing how to create a market exchange. You got cats wanting to talk about stock markets, forex and all that other stuff like a buyer/seller but being that brotha like me actually building the market exchange itself was the real thrill, trust me. I’m not into that first African-American to do this or that, but I know the market exchange is unprecedented and what’s important is empowering the black community immediately to be resilient in a Post-Obama America.
Let’s first talk about the ecosystem of a market exchange to understand definitions. The diagram presented above is very basic to show you where the order matching system is position in a standard trade. So let’s briefly define entities:
Trader. These are buyers and sellers who participate in a market exchange. They are usually trading monetary instruments for assets (buying) or trading assets for monetary instruments (selling).
Buyer. This is someone looking to buy an asset and what they do is place a “bid” which is stating this is how much they willing to pay for an asset.
Seller. This is someone looking to sell an asset and what they do is place an “ask” which is stating this is their offer price on the asset they are selling.
Account. This is the trade account buyers and sellers will open up that allow them to conduct trade transactions and view their holdings.
Account Transactions. This is the history of previous transactions and show all of the buying and selling history of the trade account.
Account Holdings. This is a list of current assets the account is holding right now. This is known as a portfolio to some but it’s what assets you are holding onto at the moment.
Asset. This is the actual asset that is to be traded. It can be a physical item, a future-dated contract also known as a future.
Market Maker. This is the individual who hold onto a lot of the assets to “make the market” and this is the real player in the market exchange.
Exchange. This is the actual exchange that facilitate and ratify the trading activity between buyers and sellers.
Ask. This is the order created by the seller that declare the asset, quantity and price per asset.
Bid. This is the order created by the buyer that declare the request asset, how much quantity they want and the price they want to pay per asset.
Order Book. This is a list of all of the current asks and bids on the exchange.
Order Matching. This is the system that matches the ask orders with the bid orders to make a valid trade transaction.
Deal Ticket. This is the official “receipt” of the trade between the buyer and seller outline the asset, quantity and price.
Quote. This is the price of the asset which is usually based on the last successful trade price that occurred.
Exchange Board. This is the listing of quotes that are displayed to the public as the asset “quote” to know if an asset price is trending upwards or downwards or the trade volume.
I hope all of these definitions make sense to you and understand how everything falls in place. This exchange system is what we Afro-Tech bringing to the black community that never been established before to create true economic empowerment through a free market economy. If you understand what I wrote, then you will see there can be several exchanges setup throughout the black communities to facilitate free market economic activity. Let me give you 3 real-world examples we are currently testing at the moment and rolling out in 2017:
Social Media Selling Exchange. This allow people to buy and sell on social media channels and create a trusted medium of exchange. This exchange is more like eBay and have almost the same features as an auction web site but it can do more. People can place bids on items not even out yet and once someone owns it or want to see if there is a bounty on something, they can try to get it. This is planned for our upcoming Shop Wall Star suite of services.
Prepaid Holdings Exchange. This allow the black community buy and sell prepaid points in local businesses in the black community but can be also used to fund a black business. So if someone wants to open up a beauty shop, the black community can buy prepaid points on the exchange for the product. The cool thing is the points offer value-add as a loyalty program to offer perks for those using points versus regular customers offering cash. This is our upcoming DBEXX service.
Future Contracts Exchange. The 3rd Strategic Institute is quietly working on a project that propose transforming the strip club industry to look at strippers as future contracts versus pseudo-employees. So a stripper can offer future contracts to appear at strip clubs on certain dates for a certain price on an exchange and strip clubs can bid for the future contract. If a stripper become very popular via social media and known, she can become a headliner having more followers, more patrons, more revenue to a strip club bottom line and her future contract currently held by a small strip club can be sold to a larger strip club for a higher price and she gets a cut of that contract change automatically. This allow strip clubs to hedge stripper future contracts and it can increase the value of a stripper tremendously to multi-million-dollar contracts who are currently operated on a fixed-income per dance model and hustling cats on the side.
That is just three example of how the black community can establish free market exchanges to create a market economy around us. Not only create free market economies but empower people who been economically marginalized – that is the good the Afro-Tech is about. Now here is the beautiful thing – we African-Americans start accepting market reality that things go up and things go down instead of what “black thought leaders” tell us what’s cool to us. Market economic allow the black community become more fluid in chasing what’s hot and dropping what’s not real fast and gives us a true barometer of what’s in demand and what’s not and this helps black entrepreneurs serve the black consumer with real data creating true market economic equilibrium in the black community. This has never happened before in the black community and the missing piece that the Afro-Tech will fill in.
In order for Black America to progress, we must learn to adopt successful patterns and practices around the world and seek these solutions to tailor to our benefit and interest. No one is going to sit down and advise us black people how to create a stock market exchange or a trading floor to create a market-based economy; we have to go out and get that information ourselves. So we are going to explain how the order matching process on an trading exchange system actually work, using the Taiwan Stock Exchange documentation as an example [http://www.twse.com.tw/en/products/trading_rules/mechanism01.php].
The order matching process Taiwan use is nearly the same approach other stock markets use around the world to trade but keep in mind that the Securities and Exchange Commission in the USA have specific rules on order matching and process and priority and our goal is to follow the SEC guidelines to scale our exchange to run an SEC-compliant full stock exchange in the future to accommodate urban business models. Please look at the buying example below. You will see the bids on the left side and volume (quantity) and the right side is the ask volume and the middle is the price – if the bid match the price, that’s where the order matching will look at.
In the example above, you see buyers place bids and sellers place ask. The bot is looking at the next order in the queue stating buy 50 at 104.00. The way the order matching bot matching work is it will find the lowest price for the buyer to save the buyer money so it will pull the 103 x 10 first, then pull the 103.50 x 20 next then pull in the remaining 104.00 at 20. In the exchange, we do not increase the seller offer from 103.00 to 104 because the seller committed to selling at 103. So the buyer save $20 from the transaction as the buyer was willing to pay $5200 and the bot order matching pull together $5180. The exchange board will update the last price/quote to 104.00 after the deal ticket is generated.
In the selling example, the bot see an ask order hoping to sell 50 at 102.00 on the market. The bot will find sellers with the highest price so it will first pull the 10 at 103.00 then 20 at 102.50 then 20 at 102.00, pulling the highest first to the lowest. So in this case the seller wanted $5100 and the bot found $5120 generating more money from the market.
I hope this helped you understand how the order matching system work on a market exchange. Notice the bot wasn’t acting shady like real cats around us be acting with money and deals – if there are better quotes, the bot look for them first and match them to offer the best price to maximize profits or savings. The bot process the trade and create a deal ticket for each trade between each party at the various ask/bid prices. The deal ticket is recorded on the blockchain so multiple parties can view our transactions such as governance and compliance as well as auditors. And the last trade price is recorded as last trade price on the exchange board that you know as the stock quote on a stock exchange.
Please note – this is important like all major stock exchanges. This type of trading and order matching will happen from 9am to 2pm. Then from 2pm to market close at 4pm, the last sale price will be the only price trades can be conducted at. At the end of the day, all trade order requests that did not match are cancelled and tomorrow is a new market trading day.
While this may sound boring to some of you, I cannot describe as a black man how exciting it is creating a market trading platform for the black community was and seeing the concept actually works, especially the order matching system. We can find almost any asset we have in the black community and set it as a market price to maximize savings or maximize profits using bots, not shady ass folks trying to price hustle us. And cats don’t have to interface with each other – you place your bid, they place an ask and let the bot work out the deal in a fair manner, saving you money or increasing your profit. This allow the black community truly know what’s in market demand in their black community.
Where do we go from here to integrate the market economy in the black community? We create the exchange and we place the digital tickers and display so we can see the prices and trades and assets available in the black community we can trade on. We become our own newsmakers by investing and trading and exchanging with each other in the black community. So we take over both media and trade and assets in the black community immediately and black people can see their worth and market conditions immersed in their community. This in turn let the black community know they have value they can exchange and this is the key factor what was always suppressed in the black community – they did not want us to know our value and have the ability to market that value.
Download Presentation Here –> Market Economy Presentation
As a bonus, I’m providing an once exclusive presentation I provided to the defuncted Global Urban Collective about the market exchange and you will find good background and approach in this documentation. I’m not sure if we doing what is presented in the presentation but it gives a good idea on what we doing.
Once again, the global Afro-Tech is using our STEM skills to apply to the betterment of our urban communities around the African Diaspora, putting our knowledge to power to empower us. It’s finally time we transform our communities to a market economy to realize our own value instead of seeking validation and acceptance as well as begging for set-asides and handouts from others. Like I said, no one knows a damn thing about black economic empowerment until they have the skills and ability to build out a market exchange system and the Afro-Tech are the first and the realest to get this done and once again, cats can bump their gums about black economic empowerment but no one on the corners have swagger like us.