Overstock.com is reorganizing its security system. It was reported that the company issued a private digital bond according to which accredited investors will trade using blockchain, a distributed online ledger underlying bitcoin.
It should be noted that the company has a large cryptofinance initiative called Medici. Development of cryptosecurity is only one step in remodeling of digital market planned by Overstock.com. Patrick M. Byrne, Overstock’s CEO, says: “The cryptorevolution has arrived on Wall Street. We’re making it official by offering the world’s first cryptosecurity”.
Byrne explains what they mean by cryptosecurity – it’s the one that “trades on a cryptographically-protected distributed ledger”. Thus potential buyers will manage to control their funds on the blockchain.
The company aims at getting $25 million from investors but admits that it might issue a bond for less to initially launch the project.
On the one hand the bond could be seen as just an attempt, a simple curiosity. But Byrne insists that digital market has needed changes for so long. The systems used by the NASDAQ and New York stock exchanges should be replaced in order to move forward.
Overstock.com is now offering a market driven by blockchain-like technology – thus offering a more reliable and more transparent market. “There are all kinds of ways to rig the market. We want to make it un-rig-able,” explains Byrne.
The whole idea that underpins cryptosecurity looks as follows – it is mathematical algorithms that blockchain uses to confirm bitcoin transactions. Overstock.com is planning to apply the same algorithms to security trades.
Certainly there are doubts if blockchain technology can suit the rapid pace of Wall Street transactions. But cryptosecurity of Overstock.com is definitely should be given a shot to see whether it will work well.
The issue of the bond is based on the technology TØ.com which “refers to the fact that trades on the system securely settle same day, as opposed to three days later”. Wall Street traders call it “T+3”. Issuing bonds on TØ.com platform serves as evidence of cryptotechnology as a way to provide a more secure access to funds.
Cryptobond offer was made only for those institutional buyers who correspond the definition of “accredited investors”. The informing of investors took place on June 1, 2015.
Cryptocurrencies are moving into top gear nowadays and Overstock.com is an important part of this movement. It has recently purchased 25% stake in government-run commercial company PRO Securities which is known for its alternative approach to trading systems. The step was all about plans of Overstock to issue a new digital currency. Now the company has all chances to become the one that will revolutionize the digital market.