Bakkt — To The Future

by Allan Ewart

Logos courtesy of BAKKT, ICE, NYSE and Stock images by Pixabay

The owners of the New York Stock Exchange (NYSE), Intercontinental Exchange (ICE) have announced the development of a ground breaking new platform called BAKKT that will enable physically settled Bitcoin futures contracts.

The Atlanta based company led by CEO Kelly Loeffler is partnering with several big names including Microsoft, Starbucks and Boston Consulting Group (BCG) in a game changer set to finally bring Bitcoin to the mainstream. Pending regulatory approval the Bakkt product is expected to launch in November this year (2018).

ICE and partners have been “building the factory” that will power Bakkt in the strictest secrecy for about the past year and a half. Apparently the name of the company was only decided upon a few weeks ago. Loeffler explained in an interview to Fortune that——

“Bakkt” is a play on “backed,” as in “asset-backed securities,” which is intended to evoke a highly trusted investment.

This development is hugely significant for Bitcoin and the future of the asset class in general because it is likely to encourage more traditional institutional investors to get involved due to the fact that ICE will serve as the custodian of all assets that are stored on the Bakkt platform. The lack of this regulated custodial element has been a major stumbling block up until now. With Bakkt, that confidence barrier will have been removed.

Technically, the Bakkt platform itself will actually operate as a layer on top of the Bitcoin blockchain by way of an “omnibus ledger” enabling it to be used for international payments and frictionless transactions between businesses connected to the Bakkt ledger. As Kelly Loeffler explained to Fortune, it operates very similar to the ‘Lightening Network’ that’s already in use. However, to grasp the magnitude of how the Bakkt platform is intended to operate, ICE’s CEO Jeffrey C. Sprecher is quoted as saying:

”Bitcoin would greatly simplify the movement of global money, and has the potential to become the first worldwide currency.”

As we all know the fiat currencies are all well passed their debt based sell-by date. There is now no doubt in my mind that Bitcoin and other Cryptocurrencies are to become the replacement of fiat.

Thus, it is my belief that when the Bakkt floodgate opens in November, the result should be nothing short of spectacular, not only for Bitcoin, but for other blockchain based alts and tokens too.

Sprecher and Loeffler maintain that although the Bitcoin of the future might not necessarily resemble the crypto-anarchist utopia envisioned by early purist cryptocurrency adopters­ —

“Bitcoin can’t survive as a rogue idea,” Sprecher says. “To evolve, the cryptocurrencies need to run on established infrastructure. They need the trust and rules that have been built into our financial system for many years. They need the kind of trust that the Big Board represents.”

That said, a lot has happened in the past decade since Bitcoin was born, and there are now many blockchain projects (a few examples here) that are aiming to bring decentralised applications into the mainstream to realise that original vision.

So my guess is, moving forward it will be a mix of both centralised and decentralised ecosystems that will have to interact with each other to evolve.

Disclaimer:

For the avoidance of doubt, this article is unsponsored. Nothing that is written in this article should be in any way misinterpreted as investment advice in any way shape or form. Cryptocurrency is highly speculative and subject to extremely high risk. Always carry out your own due diligence.