The countdown begins as Bakkt is set to go LIVE TOMORROW September 23, 2019.
So, everyone is talking about Bakkt, but what is BAKKT exactly, and why do institutional companies and big players in the cryptocurrency space finds their launch so important?
Bakkt is a futures exchange and a digital assets platform launched by the Intercontinental Exchange or ICE and the brainchild of the New York Stock Exchange. The owners — Jeffrey Sprecher a Wallstreet Giant and currently the chairman of NYSE and his wife, Kelly Loeffler CEO of Bakkt.
The goal is to make Bitcoin mainstream. The main idea is to provide institutions and traditional investors the chance to buy and sell digital assets in a US federal environment, which are now all made possible as the Commodity Futures Trading Commission or CFTC has finally approved of its launch after nearly a year of delays and false starts.
As Bakkt’s main goal is to provide mainstream adoption of Bitcoin, and other cryptocurrencies in the future, it is enabling huge and small types of institutions, merchants, and consumers alike, access to digital assets by providing a secure and trusted ecosystem through their platform.
To attain this, Bakkt has developed its very own digital asset infrastructure that focuses on custody, markets, payments, and compliance.
Let us go over each of these and find out what Bakkt has to offer.
Ironclad protection is essential in any type of investment vehicle or asset class be it on stocks, bonds, mutual funds or in Bakkt’s case, Bitcoin and digital currencies.
Bakkt has then piggybacked their technology on Intercontinental Exchange’s technology — to ensure the top-most security of their digital assets storage.
Warm and Cold wallet storage has been built, but the majority of the Bitcoins, will be stored in a cold wallet storage warehouse, that is Air-gapped equipped, with state-of-the-art bank-grade security vaults, stored, at the deepest of the deep vaults disconnected from the web.
The fortress-like protection installed by Bakkt for the owner’s wallet, would then require wallet keys to be sharded and then encrypted upon creation. This would, in turn, require multiple key-shards to sign a single transaction as an added layer of security.
To request for a withdrawal or transfer, the bitcoins must then leave the Cold storage warehouse then move to warm storage via electronic transfer over the internet.
Most of the big names in the cryptocurrency space and institutional investors find Bitcoin as a good store of value — and not as a convenient medium for retail payments due to its scalability issues and fat transaction fees.
This is something that Bakkt owners Loeffler and Sprecher aims to change in collaboration with Starbucks, one of the world’s biggest food company. With the use of Bakkt Application (Bakkt Pay), users could then convert their bitcoins to dollars using their mobile phones. This would, in turn, result in a 75% reduction in transaction costs compared to payments made directly via Bitcoin.
Bakkt meets regulatory standards for digital asset markets and is accessible by qualified market participants in the US and across the globe.
In their website it says:
We’re partnering with ICE’s leading futures exchange and clearing infrastructure to bring physically delivered futures contracts to market participants around the world. Participants undergo applicable AML/KYC reviews, consistent with CFTC-regulated markets and connect via ICE’s existing infrastructure.
As everyone is getting excited, and all hyped on the official launch of Bakkt, we do expect critics on the opposite side of the spectrum. Its critics say that Bakkt’s platform defeats the entire purpose of Bitcoin which is the decentralization and eradication of intermediaries to promote a more transparent financial system.
Let us all stand by for the countdown, as we all witness the launching of the moonshot vision of Bakkt.