Bakkt Announces Bitcoin Futures

The crypto exchange Bakkt will delight the market with futures contracts in the future. According to a press release, the futures for the crypto currency Bitcoin are due to come this year. This announcement follows a recent personnel change.

Announcement after Bitcoin evolution

Bitcoin futures and their influence on the market should have been known since last December at the latest. The announcement and launch of Bitcoin’s futures contracts by the CME and CBOE (among other things) resulted in strong growth in the Bitcoin evolution price. The signal behind it: We are dealing with regulated, government-approved financial products, so they must be legitimate.

The fact that this does not always have the desired effect for investors became apparent a few months later. The launch of the Bitcoin futures coincided with a (so far) incomparable bull run, which flattened out just as quickly. The air from the bubble escaped with high speed, many were alienated. The accusation of manipulation was not far off – according to studies, the Bitcoin futures had as much a share in the price rise as in the price fall. But as we now know, the brief bubble formation only led to the market now being more mature than before.

Physically Backed Bitcoin evolution

Now Bakkt is entering to bring a new product to the market: physically deposited Bitcoin Futures. In contrast to the common Bitcoin evolution review, you bet a little differently here:

“These are futures contracts, the fulfilment of which changes the asset (here: Bitcoin) or the ownership right to it the owner. This means that the short position undertakes to sell the previously determined quantity of Bitcoin to the counterparty at the previously agreed price after the expiry of the contract and to transmit it “physically” (if this can be spoken of at Bitcoin). Should the Bitcoin price at this time be higher than the agreed price, the short position has made a loss. The deal for the long position was accordingly good”.

Here you can find the explanation in detail.

The physically deposited Bitcoin futures were originally planned for November. Having recently received prominent support from Adam White of Coinbase, the Exchange announced in a press release the final date for the launch of the futures contracts: 12 December 2018.

What about Ledger: IOTAs Tangle and Hashgraph

After explaining the difference between the distributed ledger technology and the blockchain yesterday, today we are talking about two alternatives to the blockchain: IOTA’s Tangle and Hashgraph. Of a lot of data clutter and blossoming trees.

As popular as blockchain technology may be, there are always certain points of criticism that call the concept into question. Especially the Bitcoin blockchain with its proof-of-work process now takes quite a long time to confirm transactions. While the number of transactions to be processed is constantly increasing, the technology does not seem to lag behind in terms of speed, the memory required by the blockchain, the speed and the result are no longer in the right proportions. There are several approaches to this problem of scalability, two of which are Tangle and Hashgraph. Both systems will be examined in this second article of the series “Was zu Ledger”. We will again address the more advanced user.

Tangle – a neat tangle

Just like the blockchain, tangle is a peer-to-peer network. This means first of all that they are operated by equal actors. The IOTA team that developed the Tangle want to stand up to the blockchain with better scalability, faster and more secure transactions. As the name of IOTA (Internet of Things Association) indicates, the network is designed to provide a payment system for the Internet of Things.

For this purpose, the DLT under IOTA, the tangle, wants to be no blockchain. Instead of a blockchain, IOTA uses a directional, i.e. directed acyclic graph (known as DAG for short): Unlike the blockchain, whose data structure is a concatenated list, here a single data node has more than one child. Therefore, these nodes are loosely distributed. In contrast to the chain of the blockchain, the tangle is a tangle of nodes. There are other crypto currencies like Byteball, whose data structure corresponds to a directional acyclic graph.

This node network grows with each new transaction. Because the tangle does not grow in one direction, it promises a simultaneous processing of many transactions. Therefore, a part of the network can also act temporarily detached from the rest and be reunited with the tangle at a later point in time.

All beginnings are difficult

Tangle also wants to differentiate itself from the Bitcoin blockchain when checking transactions. Each new transaction checks two existing transactions. These are selected randomly using an algorithm. There are two main criteria for the check: No more tokens may be issued than are available. In addition, the transaction must be signed by the rightful owner.

Because each transaction represents two already validated transactions, the network theoretically becomes more secure with each new transaction.

However, all beginnings are difficult. The first transaction, called Genesis, had no transactions to fall back on. Therefore, the tangle currently still operates with a “coordinator” who confirms all transactions. It is precisely for this reason that IOTA is controversial in the community despite well-known cooperation partners such as Volkswagen, Innogy, Telekom and others. If the network is large enough, this “coordinator” should no longer be needed.

While the problems of the Bitcoin blockchain in terms of speed and energy performance are solved theoretically, doubts about the autonomy of the technology arise with the Tangle.