Bitcoin technology is what will bring a lot of change into our everyday lives over the next few months and into the years to come. One of the most interesting possibilities of this technology comes in the form of smart contracts. And it looks like investors all around the world see the potential from smart contracts as well, which is one of the reasons why Hedgy raised US$1.2m in seed funding last week.
Hedgy: Boost VC Accelerated Bitcoin Startup
Most of our readers will be aware by now that there is a lot of venture capitalist funds flowing to Bitcoin and digital currency-related projects and companies. That is only normal, as new and innovative technology attracts a lot of people who are looking to become a part of “the next big thing”.
In the world of Bitcoin startups, special accelerator programs have been created, where selected companies will receive guidance in order to reach their full potential. But that is not all, as all eligible companies will receive [temporary] workspaces and financial funding once their “incubator period” comes to an end.
The reason Hedgy became part of one of these Accelerator programs for Bitcoin startups is because of their ideas revolving around smart contracts. Smart contracts are a digital agreement between both parties, of which the outcome can be verified and determined by a non-human entity. In most cases, the “judge” of a smart contract will be a piece of software, but, human arbitrators are an option as well.
Hedgy has taken the idea of smart contracts a few steps further, and created an over-the-counter derivatives network using blockchains to execute and settle smart contracts for commercial hedging. This project is especially interesting for Bitcoin miners, as they will be able to mine bitcoins at a fixed price for delivery on a future date.
“At Hedgy, we envision a world where commercial contracts are executed and enforced by the laws of math, not the flaws of man,” Hedgy CEO Matt Slater told the media.
Partnership with MegaBigPower
In order for Hedgy to venture into the world of Bitcoin mining, some strategic partnerships had to be established. The first partner is MegaBigower, one of the largest Bitcoin mining operations in the world. Hedgy’s goal is to let miners lock-in the value of their Bitcoin via a smart contract, allowing them to operate under certain price guarantees.
The current state of Bitcoin mining promises everything but a guaranteed price for miners, due to ever-increasing hardware and electricity costs. Not to mention the Bitcoin price fluctuations, which – even though far less drastic than a few years ago – make it nearly impossible to mine Bitcoin and make a profit from doing so.
“I believe Hedgy’s smart contracts are the future of finance, because they reduce downside risk for all parties in an extremely efficient and programmable way.” – Dave Carlson, CEO of MegaBigPower
Crypto Facilities Joins the Fray
There is a third player in the mix as London-based derivatives broker, Crypto Facilities, bring their expertise to this project. Furthermore, Crypto Facilities is also a liquidation provider for over-the-counter Bitcoin transactions. Without their corporation, the entire project would be not be possible.
“The Hedgy team has engineered an excellent product that mitigates a key issue in bitcoin trading: counterparty credit risk. It takes the whole space to the next level. Their market is one of the few we are comfortable taking exposure on, and we work with them to facilitate transactions of any size,” Dr. Timo Schlaefer, Co-Founder of Crypto Facilities told DigitalMoneyTimes.
Note from the Author: The Hedgy team recently closed a $1.2M Series Seed round from Tim Draper, Marc Benioff, Sand Hill Angels and eight others.
Source: Hedgy Blog
Images courtesy of Hedgy, MegaBigPower and Crypto Facilities