Why Bakkt Is Critical For Cryptocurrency Becoming Mainstream In The US
As it stands, the crypto-verse is currently being captivated by a platform known simply as Bakkt.
Even though a release date has been fixed and announced in the crypto community, fans and enthusiasts alike are still left wondering what the fuss is all about for what Bakkt truly is.
So, we will be more than delighted to enlighten everyone on Bakkt.
Now, What Is Bakkt?
First and foremost, it is vital to have in mind that Bakkt is a custody platform that is being regulated and it is also a tool used for the buying, selling and storage of Cryptocurrency assets that are targeted at:
• Merchants, and;
• Companies such as Starbucks
The plans Bakkt had at the beginning were to offer both daily and monthly physical Bitcoin futures and offer more derivatives in the near future.
Also, Bakkt is not left alone without a founder. The platform was established by the ICE; Intercontinental Exchange. Wondering who they are?
Well, these are the people responsible for one of the largest stock exchanges. This is none other than the NYSE; New York Stock Exchange.
What this implies is that ICE will be making use of the same futures market infrastructure for this Bakkt platform too.
Moreover, this Cryptocurrency exchange platform will function according to the United States CFTC; Commodity Futures Trading Commission regulations. And, it will be complying with both KYC and AML rules and the federal reporting standards.
Earlier, we made mention of the Bakkt Bitcoin futures. We will be giving a detailed explanation of it.
Like we mentioned a while back, Bakkt cryptocurrency exchange will offer roughly two types of Bitcoin futures which are the daily and monthly futures.
The major difference between the futures by Bakkt from these same derivatives on all other platforms is that the Bitcoin will be delivered physically to the trader’s wallet.
Differing from CME, the clients of Bakkt will get their Bitcoin when the contract expires and not the traditional fiat equivalent of Bitcoin’s price.
Also, Bakkt has gone on to partner with diverse top organizations in a bid to successfully create its platform. Some of these organizations include:
• Starbucks, and;
• BCG; Boston Consulting Group.
The major aim of Bakkt is for individuals to utilize virtual currencies in their daily activities without any friction over the network. Nonetheless, Bakkt has also partnered with huge investment groups such as:
• Eagle seven
• Susquehanna International Group, and;
• Fortress Investment Group, etc.
These partnerships were carried out with the major aim of creating a clear path for big-time money managers to provide things like:
• Pension funds
• ETF; Exchange Traded Funds, and;
• Bitcoin mutual funds
How Bakkt Works
Bakkt will be providing institutional traders with nothing else but daily and monthly futures contracts of physical Bitcoin. This has the prospect of leading them onto the mainstream approval of not just Bitcoin alone but other virtual currencies.
Similar to the Gemini-supported Flexa, Bakkt is looking forward to receiving diverse commercial retailers. It aims to offer consumers a simple way of buying goods and services using virtual currencies.
In all honesty, this will be taken as a monumental step towards mainstream acceptance for the cryptocurrency industry.
Basically, Bakkt works to further innovation and at the same time, protect all its users. While you may be wondering why Bakkt is so important due to the way people have been waiting on its launch, the reason is not far-fetched.
The launch of Bakkt is important as a result of the fact that it will provide a way for huge yet risk-averse institutions to purchase and even store their Bitcoin via an end to end regulation network that will be approved by both the CFTC and the NYDFS.
Also, it will be supported by highly reputable ICE. And, this is just a part of the reason why we await Bakkt.
What Are The Potentials Of Bakkt?
No one will surely be waiting on a platform that has no signs of high prospects. So, it goes to show that the potential of Bakkt is one that is placed highly.
Some of its likely potentials include:
• Secure Storage
Even though there are very strict AML; Anti-money laundering and KYC; Know your customer policies that are effective for the approval of CFTC, Bakkt, on the other hand, is bolstering a big system of storage.
In a bid to prevent breaches in security, Bakkt has the plans to keep user’s private keys offline in a heavily protected warehouse that has the same resemblance with cold wallets.
Bakkt platform will be making use of double key security whereby, clients will be able to access their funds with the aid of private keys and the warehouse will release these funds via public keys.
• Off-Blockchain Transaction And Microsoft’s Azure
For its technical operations, Bakkt is based on the prominent Microsoft’s Azure cloud computing service that works via Microsoft controlled data centers. It is centralized.
To tackle the scalability problems of Bitcoin, Bakkt will make use of a technology that is similar to the lightning network. Also, they will create a system that greatly functions outside the Blockchain.
Furthermore, transactions will be transferred in just one ecosystem and it will not be largely dependent on blockchain.
• Retail Payments
Asides from creating a platform for all institutional investors that are still hesitating whether to join the crypto-verse, Loeffler and Sprecher; Bakkt's founders are hopeful that they will make Bitcoin payments much more common.
All of this will assist in pushing the acceptance of Bitcoin in the retail payment industry. And, the banks and credit card issuers will be able to take their own percentage or cut from every transaction made.
To Wrap It Up
The plans of Bakkt are huge and the platform will work effectively to satisfy its clients and push its major agenda which is to take Bitcoin to the mainstream for it to be used just like every other traditional fiat currency.
Also, you should know that Bakkt will be launched September 23rd. Let's see how it holds up.