Blockstream who raised a $21 million seed round in November 2014 for their startup and much anticipated sidechains technology, just announced the first implementation of a production sidechain – Liquid – in collaboration with several bitcoin exchanges.
In the launch announcement, Blockstream CEO and co-founder Austin Hill wrote that “Liquid will improve capital efficiency and market liquidity by facilitating rapid and secure transfers between accounts held at any participating exchange or brokerage.”
As part of the initial launch Blockstream partnered with bitcoin exchanges Bitfinex, BTCC, Kraken, Xapo, and Unocoin. Blockstream is in discussions with several other exchanges as well, including Chinese bitcoin exchange OKCoin.
With the bitcoin network, typical confirmation times can be ten minutes for a single confirmation and up to an hour for six confirmations; the more confirmations, the better (more secure). With Liquid, users are able to achieve the same levels of security as the bitcoin blockchain but at a more rapid speed. Blockstream plans to solve liquidity inefficiency issues that hinder bitcoin exchanges through the use of this sidechain technology, allowing for rapid transfer between accounts.
“By providing users a way to securely and instantly move funds across exchanges, Liquid allows participants to take advantage of trade opportunities like never before, minimizing spreads and increasing liquidity. Blockstream’s innovative solutions are definitely a game changer for the Bitcoin industry.” – Zane Tackett, Director of Product Development, Bitfinex