“Brickblock addresses ‘the volatility of Bitcoin investments, counterparty risk, as well as high costs and complexity in conventional stock trading, and global trading restrictions’."
Cryptocurrency is the marriage between cryptography and digital currency. Rather than being processed by central banks, transactions are encrypted and made directly between traders. These transactions are recorded in a public ledger where they can be viewed by anyone, enabling any issues to be reported.
Enabled by Blockchain software, cryptocurrency is not attached to banks for foreign currency, making it immune to inflation. The fixed quantity of cryptocurrencies like bitcoin eliminate the ability to print more. Like gold, it is a commodity with a value that is contingent on the miner’s activity in buying and selling it. This could make it immune to problems that the Euro saw in 2010 with Greece’s debt crisis, since its value is not dependent on the value of global currencies like the U.S. dollar or Euro
But despite being immune to inflation, one of cryptocurrency’s weaknesses is stability. In 2009 Bitcoin was the first, and still the most widely known, cryptocurrency. Not even 10 years later, more than 900 similar currencies can be found on the internet, and their popularity often determines their validity as currency. Also, the value of these currencies seems to be in a constant flux. Today, one Bitcoin is sold at over $15,000 U.S., but it is a risky business—the risk of this bubble bursting is quite real.
Brickblock introduces the first platform where users can seamlessly invest in real estate funds (REFs), exchange-traded funds (ETFs), passive coin-traded funds (CTF) and active coin managed funds (CMFs) through a streamlined process and with significantly lower costs than traditional investing. Each fund on the Brickblock platform has its own denomination and its own "proof-of-asset" (PoA) token which, via established token exchange platforms, can be traded simpler, faster and cheaper than on conventional stock markets. Our asset-backed PoA tokens empower investors to hedge the risk of cryptocurrencies in real assets without needing to convert their cryptocurrency into a fiat currency. All dividends and coupons are automatically transferred to token-holders through self-executing smart contracts on the Ethereum network. The content of the smart contract and the PoA token itself is unalterable, cryptographically secured and visible to everyone on the blockchain. To ensure the safety of the underlying assets represented by the PoA token, a digital trust fund holds the exact same amount of fund shares as tokens issued. This securities account cannot be claimed by Brickblock, the broker or anyone else, and is protected by strict laws regarding trust funds, even in the case of bankruptcy. Only token holders may reclaim their fund shares, at any time. Brickblock’s infrastructure will be implemented as a decentralized application (Dapp) and run on the Ethereum network. Broker-dealers and fund managers will be able to list their investment opportunities on the platform, after being thoroughly verified by Brickblock through e.g. proof of residence, credit reports and criminal record. Based on their personal risk/reward ratio, investors can then select an investment from the offered funds to add to their diversified portfolio. All fees, minimum investment pools, exchange rates, holding periods, net asset values, dividends or coupon payments will be listed clearly and thus, can easily be compared. All investment opportunities will be carefully validated and audited by independent parties (such as EY [1]) to eliminate fraud.
HOW DOES BRICKBLOCK
Addresses current problems?
2.2.1. High Volatility
By enabling the direct purchase of real-world assets, such as ETFs and REFs, with Ethereum, we are offering a simple way to hedge against volatile cryptoportfolios with low beta asset classes. beta = [Cov(r, Km)]/[StdDev(Km))]2 ,
(1) 2.2.2. Counterparty Risk
(2) By using the blockchain for clearing and settlement processes, Brickblock reduces counterparty risk exposure from multiple days to less than 1 minute, or more precisely: to the length of a few Ethereum block confirmations.[2] 2.2.3. High Costs and Complexity in Conventional Stock Trading Through a high degree of automation, blockchain technology and the use of smart contracts, we are able to bypass a number of third parties, such as clearing houses and retail brokers. This allows us to reduce the fees associated with buying and selling real-world assets down to a fraction of traditional retail brokers. Depending on the country of purchase, the specific asset and the investment amount, Brickblock is able to offer up to a 50-fold discount on the initial purchase price. If the asset is then subsequently sold on token exchanges, this discount can easily increase to 150-fold. An in-depth comparison of Brickblock fees vs. traditional broker fees is available on our blog.[3]. 2.2.4. Trading Restrictions No bank account is needed to trade global ETFs and REFs since no geographic borders apply. This enables Brickblock to offer the cheapest ETFs and REFs worldwide and the most economical way of order execution.
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https://www.brickblock.io/
http://www.brickblock.io/
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