Overstock.com CEO Patrick Byrne just launched the first ever cryptobond, and he’s hoping the technology behind it reinvents the way people buy and sell stocks.
What is a cryptobond? Well, it’s the same thing as a regular bond that a company would use to raise capital, but instead of buying and selling it on, say, the NASDAQ, a person would buy and sell this bond using the same technology behind bitcoin.
“It isn’t just about bitcoin, that’s the sideshow,” says Overstock.com CEO Patrick Bryne. “You can use this technology to recreate Wall Street.”
That’s Overstock.com CEO Patrick Bryne. He’s referring to the blockchain protocol, which is essentially a digital ledger that is distributed to all users of the system. New transactions are then checked against the ledger to ensure that the person actually owns what they say they do. Byrne says this system allows for the elimination of corruptible third parties, like banks and government regulators.
“That’s really revolutionary,” he says. “None of these games can go on. You’d have to rig the laws of mathematics to rig the cryptosecurity market. And even J.P. Morgan, Goldman Sachs, they own themselves their own personal senators and congressmen and regulators and politicians, but even they can’t rig the laws of mathematics.”
While Overstock is only working with one private security right now, they ultimately plan on using the technology to create an alternative stock exchange. But University of Utah law professor Jeff Schwartz says getting to that point will likely involve a lengthy and arduous process with the Securities and Exchange Commission.
“This type of market involves enough changes to the process of transacting and securities and to the market themselves that the SEC is going to need to either explicitly, or implicitly sign off on all of the steps of putting this in
Originally appeared at: http://kuer.org/post/overstockcom-trying-reinvent-wall-street