Patrick Byrne confirmed his intention to offer $25million Overstock Bonds using the same software protocol that powers Bitcoin, wrote Wired today
Mr Byrne has long harbored the desire to launch an alternative to established Stock Exchanges using Blockchain technology and has recently filed papers with the SEC seeking approval for just such an exchange.
The SEC is still reviewing the application but Mr Byrne stated that the private bonds could be issued without SEC approval and he sees this as a proof of concept for the larger proposal.
First, the technology needs to be able to handle the volume and speed of trading currently handled by existing Stock Exchange technology. The second is to attract the major liquidity providers onto the platform. The second problem may be the harder nut to crack. Drawing liquidity away from existing pools is notoriously difficult without the backing of some major liquidity providers; many of the largest of these companies already have a vested interest in maintaining the status quo.
Neither of these hurdles are insurmountable. If a technology is truly disruptive then the benefits will outweigh the biases of the “Old Guard” but equally, don’t underestimate the problems that may lay ahead.
However it pans out one thing is certain…I’m sure the demure Mr Byrne will inform us all how it’s going. Good luck with the revolution.