What?
As Katipult’s CTO, I’m frequently being asked by our customers if and what we’re going to do with BlockChain. The idea of BlockChain is absolutely viral in the FinTech sector right now, and it seems that every company is eventually going to need some perspective on it. To me, it no longer seems like an avant garde idea. It now seems that the benefits will cause the technology to propel forward exponentially - but how?
My mind has been racing with creativity for the past few months on how to actually use this technology, and I learned a few things that are short and easy to digest.
1) BlockChain is not BitCoin; BitCoin is an application running on the BlockChain. There are many other applications that could run on the BlockChain, the technology isn’t limited to just currencies.
2) BlockChain is not a database. I used to think that BlockChain was the database that BitCoin ran on, but when I started to read more, I realized that BlockChain is a distributed computer running trusted code.
So, the future of BlockChain is to run applications that are trustable and unforgeable. The possibilities for this are huge, and it will be a paradigm shift, but that’s a bit ahead of our time for now. Baby steps.
Why?
Katipult is a product for Private Market Securities Investing. We have had a lot of success (and fun) in the primary market world of crowdfunding. We are asked by regulatory bodies and platforms what we’ll be doing with the secondary market side. Investors want to be able to have access to liquidity if a life event occurs, and regulators want to make sure that Investors are being treated right.
When we think about the big names in the markets (Nasdaq, TSX, LSE, etc), these groups function with a high level of trust. Trust is a necessary component to the market; and the technology of BlockChain is structured in such a way that it is unforgeable and inherently trustworthy. The math behind BlockChain provides a completely solid foundation.
How?
Katipult is currently in the process of creating a distributed application (DApp) that will support Secondary Market Crowdfunding. We are looking to build this on the Ethereum platform, but we’re still exploring our options as we pursue the right venue for our business model.
When an offering is closed that will be secondary market eligible, a BlockChain token will be created that represents this security. An initial placement will occur where the Investor has the shares injected into their chosen Ethereum wallet (no this doesn’t involve any mining or anything complicated). The investor will be able to see their balance either through their Ethereum wallet or through the Katipult system.
Using the Katipult platform, an investor will be able to make a bid on a security or will be able to sell a security. There will be a list of which trades are available, and the investor can choose to change his bid or sell price in order to make the transaction.
The system will be updated with the transaction information; in this way; Katipult works alongside the BlockChain to provide overall reporting on any exchange taking place and the BlockChain tracks the exchange itself.
In addition to this, Katipult will (for the first few years) track this information in a relational (conventional) database to ensure that the BlockChain data is valid and that the implementation of this nascent technology is executed properly.
Primary Markets and the BlockChain
We’ve received a number of sales inquiries throughout the years about doing a Primary Market over some BlockChain currency (whether it was BitCoin, LiteCoin or Ether), and this has intrigued us, but no customers have ever pulled the switch on it. While it’s just another currency, it turns out there are regulatory hurdles to cross before cryptocurrency actually solves any problems.
Katipult now has 10 different payment gateways integrated around the world (and growing). If there is a sufficient interest in adding these alternative currencies, we will look further into adding them to our platform.
