Blockchain, the conceptual engine underlying
Bitcoin, has far-reaching potential to revolutionize much more than
just our system of currency.
The Agora Voting Project uses a blockchain to facilitate a
secure electronic voting system and has already been used in
Spanish Congress. Bitcloud is a project that aims
to create a decentralized, alternative Internet based on a
technology similar to blockchains. Now Patrick Byrne, the
pioneering CEO of Overstock, wants to remake the stock market the
same way.
Overstock was already one of the first
large vendors to accept Bitcoin, and did $126,000 worth of Bitcoin
transactions in the first 24 hours. Clearly though, Byrne has much
larger plans for incorporating decentralized systems in the
marketplace. On Tuesday, Overstock posted on their blog a rough
outline of all the potential ways that a business could issue
cryptosecurity.
Essentially, instead of having a central stock exchange such as
NASDAQ or the Chicago Stock Exchange, trades would be executed and
cryptographically confirmed on a decentralized, public ledger that
can be viewed by anyone at anytime—a blockchain. Overstock is the
first to admit that this is all still theoretical:
“However, how a public company would issue a cryptosecurity has
yet to be established. So as to reduce regulatory opposition a
cryptosecurity should, at least initially, mimic as closely as
possible the economic and legal rights of common stock, but because
the characteristics of and methods of issuing a cryptosecurity may
be novel, how such a security may be issued and traded, and the
risks associated therewith, deserves careful thought.”
Byrne’s motivation in creating a decentralized system for
trading securities is apparent as he has a history of picking
fights with the giants of the stock market. In 2007, Overstock went
after 12 brokerage firms on Wall Street, suing them for $3.48
billion. The company accused them of naked short selling, which is
when brokers sell shares of a stock that they don’t actually have,
intending to drive the price down and then purchase it at a lower
price. The lawsuit is ongoing.
Byrne is of the opinion that questionable regulatory practices
will send us into another massive recession unless something
changes soon. Earlier this year, he told
Wired, who calls him the Bitcoin Messiah:
“Someday, either zombies walk the earth or something close to
that. Bitcoin is the solution.”
from Hit & Run http://ift.tt/1pK42WW
via IFTTT