Why the ‘Flash Boys’ Are Fighting Opaque Gold Markets With Blockchain

By September 13, 2016Bitcoin Business

The code at the heart of the IEX stock exchange that inspired author Michael Lewis’s bestseller "Flash Boys" could soon form the foundation of a blockchain-based gold exchange. As part of a $9m investment by IEX and Sprott Inc in the newly launched Tradewind Market, the codebase will be integrated with an as-yet-undetermined blockchain for the purpose of streamlining gold trading and bringing more transparency to the market. But a key difference is that while IEX’s secret sauce was the so-called " speed bump " that slowed some kinds of high-frequency trading in an attempt to create a more equitable market, Tradewind has set out to use blockchain to make it easier for trades to remain compliant with regulation while accelerating settlement. In his first ever interview about Tradewind, the startup’s president and the former head of product for IEX, Matthew Trudeau, explained how a research effort within the stock exchange gave it the idea to modernize precious metals trading. Trudeau told CoinDesk: "We had this view that maybe this blockchain technology could find a place in the new world that was emerging in light of new regulations. We started with a fairly open-ended research project, not to see where we could jam the blockchain in, but to understand what clearing and settlement modalities around the world looked like in different asset classes." After settling on the gold market, Trudeau said he and his co-founders set about finding a strategic partner with industry-specific knowledge to complete their board. The final piece to the puzzle was Toronto-based Sprott Inc, which also runs the Gold Miners ETF that in July surpassed $250m in assets. As part of Sprott’s investment, the company’s CEO, Peter Grosskopf, joined the Tradewind board of directors, a group that includes IEX’s CEO Brad Katsuyama; IEX’s CTO Rob […]

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