Overstock.com’s CEO Patrick Byrne has been a champion of bitcoin since the digital currency came about. But now he’s really putting his (digital) money where his mouth is. On Monday, Byrne and his team became the first publicly traded company to issue stock over the internet using a subsidiary created by Byrne and his team powered by the bitcoin blockchain. Why is this such a big deal? Is trading about to change? What can we expect from Overstock?
What Is Overstock Founder Patrick Byrne Hinting At?
Overstock.com just raised about $2 million by issuing company shares. And they did it by breaking all of Wall Street’s traditions and rules. Overstock CEO Patrick Byrne just made history by issuing 126,000 shares of Overstock online through his platform, TØ. Byrne has been developing TØ for about two years, and Monday’s stock issuance, while not enormous, is still a big, big win for Overstock and Byrne.
What just happened?
Byrne has championed Bitcoin for years, and invested millions in not only creating the TØ platform to trade shares online, but in legal fees to receive approval to do so from the SEC. Byrne sees a future for trading where the redundancies and hidden costs of investing are removed for the everyday trader by utilizing not just bitcoin, but blockchain technology to significantly reduce the cost of trading securities. According to Bryne, “we have demonstrated to the world that there is indeed a path toward applying blockchain technology to capital markets in a way that complies with regulatory requirements and is accessible and practical for both issuers and investors. In the process, we raised a meaningful amount of capital, which Overstock can use to continue fueling our growth.”
The irony here is that Byrne spent millions to ensure regulations are followed so that he can in the future remove those regulations and middlemen from the equation, creating a more level playing field for investors. And while the stock is not being removed from Nasdaq, by adding another platform where shares can be traded, Byrne is expanding Overstock’s reach and brand, attracting bitcoin loyalists and helping his company by increasing share prices. But more importantly, the move was historic because it’s a look into the future of trading.
But is that future now?
Truthfully … no.
Companies, banks, and trading platforms are all researching and investing in blockchain technology, which is simply a way to structure data allowing competitors to share a digital ledger across a network of computers without need for a central authority. This means no single entity can alter records, which keeps everyone honest. And though the technology may very well be the future of banking and trading, offering transparency which just doesn’t exist today, the reality of blockchain technology supporting a system like the Nasdaq is still many years away.
Check this video from rutgers in a conversation with Patrick Bryne.
For now, it’s a big plus for Overstock.com (OSTK) as shares spiked UP on the news, and shold continue to do so – especially once more shares start trading digitally.
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Featured image via Coinivore