Private Blockchain system for international currency exchange and hedging

Abstract

This master thesis designs a system that utilizes Blockchain technology in international currency exchange transactions, thereby act as a currency exchange interface among private parties and companies, to enable faster and cheaper financial transfers outside of the existing inter-bank system.

A proposed platform called Sonic Markets will issue a set of cryptocurrencies called Hedgecoins. These cryptocurrencies will fund the financial buffers needed to fulfill the transactions. Since Hedgecoin is reflecting an optimized diversified portfolio of various international currencies, it is a cryptocurrency with intrinsic value. Hedgecoin is thus a nonvolatile, liquid, digital currency asset that facilitates diversified saving for everyone, including citizens of severely inflated countries. The tech infrastructure is highly scalable and adaptable towards new technologies and cryptographic systems. The Blockchain is private and thus require no mining, nor extra transaction delay due to slow distributed consensus procedures. This thesis challenges the current strive for decentralization of cryptocurrencies in a time when the complete financial and technological foundation is centralized.

The thesis includes a simple proof of concept implementation of a private blockchain in Python, as well as an implementation of a portfolio optimization algorithm that utilize a genetic algorithm to find optimal portfolios efficiently.