New Zealand based Brave New Coin and Australia based Smartbit have formed a partnership to create a new cryptocurrency index. The duo have launched the BNC Bitcoin Liquid Index (BNC-BLX) in an attempt to create the “first provable index” for financial markets.
According to information provided by the two companies, the “partnership will be the first to engage in a process called ‘Market-Chaining’ where financial data such as market indexes, quotes and trades will be secured onto the Blockchain, providing immutable receipts”.
Fran Strajnar, CEO of BNC, was quoted on the initiative;
“Imagine putting the S&P 500 on the blockchain. Any service, person or machine using this Index to settle against, all of a sudden has a trustless 3rd party to verify that official published rates were in fact used. This partnership has re-enforced BNC’s position in the industry and strengthened the company’s service offering making it stronger and more in-depth. BNC will be expanding the range of solutions and developer tools that we are planning to bring to the market,” according to Stajnar. “This first project is the beginning of a larger project, bringing financial and blockchain data together, in an accurate and transparent way.”
The BNC-BLX is described as a comprehensive historic & live bitcoin index purpose built for settlement of bitcoin derivatives. The report states there is also a growing demand for ‘proof of settlement’, which is one of the verification and auditing implications of Market-Chaining.
“We can secure any market data feed on the Blockchain in a way that does not threaten proprietary intellectual property, break existing revenue models or open up market participants to market manipulation. People trust mathematics a lot more than they trust people,” stated Strajnar.
The partnership states that the process of Market-Chaining has several benefits such as when an asset is registered by an index provider on the blockchain, either anybody or permissioned parties can verify whether third parties are acting legitimately when they are brokering, selling or facilitating financial products against an index. This has implications for auditing trade and settlement, such as offering a verification layer between them by tying together index feeds for broker quotes, trade, and settlement systems.
According to BNC, the largest benefit to institutions is the ability to shed the need for customer trust completely and to automate auditing right through the trade value chain. For the first time a mathematical protocol assumes the role of central information authority and therefore both the customer and the institution can be on an equal footing. This should give customers a huge boost of confidence in all participating companies.
The report states that Market-Chaining for indexes is ready to be applied now for exchanges and brokers, with trade and quote solutions becoming available in the new year. Both BNC and Smart Bit expect a rapid roll-out time for this line of services with provable indexes coming online from several financial institutions very early into 2016.
Brave New Coin is also running a crowdfunding campaign on BnktotheFuture seeking to raise a minimum of $500,000 USD or up to $1 million USD. BnktotheFuture was previously located in the UK but has since shifted operations to Hong Kong.