Overstock CEO Patrick Byrne is reportedly making good on his interest to for securities, a p2p alternative to Wall Street. reports that he is hiring two Counterparty developers to develop “Medici”. Byrne made the announcement at a bitcoin conference in Las Vegas.
The aim is to “democratize Wall Street” in the same way Bitcoin seeks to democratize money. The middleman removed, financial markets will be more efficient and accessible to everyone.
Embracing Bitcoin, Byrne has long been an outspoken critic of traditional finance, and Wall Street in particular. Opposed to naked short selling, in which his company has been targeted, he launched multiple lawsuits against Wall Street firms in previous years. This project will give him a playing field to take Wall Street head on, with digital currency his ammunition. For this project, however, he did stipulate that he wants Overstock “to be an adult partner to everyone involved in this. I don’t want to be an adversary.” Byrne also told Wired:
“There is an opportunity to recreate the financial world as we know it in the parallel universe that is the blockchain. We are writing rules for this whole new universe.”
Multiple protocols have been proposed for the initiative, including Counterparty, Nxt, Ripple, Ethereum and Mastercoin. It is unclear how much of a connection there will be between the new software being built and Counterparty, if any. Counterparty’s traded currency on the news.
One would be curious as to how Overstock investors are taking to the move. While the move to embrace Bitcoin was a bold one, it integrated directly into their e-commerce business model. It may even be saving them money (notwithstanding losses realized on the depreciated value of unconverted bitcoins). The only overlap this project has with the main business would be role of digital currency. Byrne is reportedly committing 5-10% of Overstock’s cash flow- ”single-digit millions”- to the project. In order to generate a positive ROI, it would have to succeed on its own merits.
Another issue, relevant to all crypto-based decentralized exchange initiatives, is if such economies remain isolated in their own digital world. Their only pathway back to the rest of financial civilization is through bitcoin, and from there, fiat. Or if such markets can integrate with the broader economy, in which case some sort of legal recognition in required. Indeed, Byrne is working with a legal team seasoned in digital currency to see how this can be done.
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