Another participant in our recent interview and workshop series is the Nxt Foundation. Bas Wisselink answered some questions regarding the Nxt blockchain’s suitability for credit markets.
How would you describe your blockchain technology?
Nxt is a second generation blockchain project that solves several problems that Bitcoin cannot or will not. It utilised the full potential of blockchain technology, using it to store and send data, send programmable tokens and allowing users to create their own tools with modular, preset, and safe tools that can be combined into new tools. Nxt does not suffer from the hardware race problem caused by Bitcoin’s Proof of Work consensus algorithm, but uses Proof of Stake, which allows for a cheap and sustainable method to achieve the same result. Nxt has been active and used for over two years now and is still being very actively developed.
Is your technology currently being used for bonds or other credit-based instruments (including derivatives)?
Nxt’s Asset Exchange and Monetary Systems features can and are used for such things.
If so, can you provide a few more details?
Several users have used the Nxt blockchain to issue tokens which are used to represent shares in businesses and these businesses allocate a portion of their profits to holders of these tokens using the Nxt blockchain. There are also multiple users that have used the Nxt blockchain for crowdfunding purposes.
If not can you indicate how you envisage your technology could be used for credit markets? What is the advantage of using your technology rather than creating a bond in a more traditional form?
The Nxt blockchain does away with the constraints of reconciling ledgers. It allows for an affordable and simple method to trade, with the benefit that trades are immediately entered into the main ledger where the data is stored in a form that cannot be altered or falsified.
The Nxt blockchain can do this at an expense of 1 NXT (0,07 dollarcents) per transaction with the current parameters. The Nxt blockchain allows users to set up such systems in a matter of minutes.
What challenges do you think a financial services partner might face adopting your technology to issue or manage credit instruments and how can they address those challenges?
One of the biggest challenges we see is the regulatory framework. Blockchain technology does not do away with the need for experts, it just makes the operations more efficient, safe and affordable.
Regulation will need to catch up with this change in operations.
Currently, there are two options available to enterprise partners: work on the public chain, or set up a chain of their own, which can be customised. The second option may seem desirable, but solves only one part of the equation, namely making the reconciliation easier. Because of the centralised nature of such a solution, it doesn’t solve the problem of the entries into the ledger being tamper-free.
The Nxt developer team is currently working on a solution which will solve both these problems and the issues that enterprises might have with a public chain.
Please provide details about your team and how people can contact you.
Our core dev team is relatively small, comprising about 6 members. Around this team, Nxt has a vibrant and vocal community that is actively involved with the platform in many roles. Day to day business contact is handled by the Nxt Foundation that can be contacted by email ([email protected]) and by telephone (+31(0) 6 37470753). More information can be found on https://www.nxt.org
