Overstock CEO: Blockchain Revolution is Going to Restructure Society
UTC by Polina Chernykh · 3 min read
Overstock founder Patrick Byrne is now going away from retail to concentrate completely on blockchain, even despite the recent collapse on the cryptocurrency market.
The founder and CEO of the US retail giant Overstock, Patrick Byrne, has unveiled he is shifting its focus to the blockchain business, as he’s confident the technology will revolutionize today’s world.
“The blockchain revolution has a greater potential than anything we’ve seen in history. It’s bigger than the Internet revolution, how it’s going to restructure society,” Byrne told Fox Business host, Stuart Varney.
When asked about the recent cryptocurrency crash, Byrne noted he doesn’t see point in monitoring daily changes in cryptocurrency’s value. “What coins are doing on any given day is silly,” he answered.
In fact, the transition began back in 2014, Byrne said, and the company has made important achievements during these years. “We now have very interesting positions in 19 blockchain companies,” he added. “Next year is when you will see blockchain really start coming out with products into the world. You’ll see blockchain products in Q1.”
Speaking of what kind of blockchain-based products we’ll be able to use next year, Byrne said: “You’ll be able to trade security tokens. There’s a whole new class of securities coming into existence called security tokens.”
“In five years, everyone will be tokenized,” he said, recalling the words of Nasdaq’s chairman, Robert Greifeld, who said last year that every stock and bond on Wall Street could be tokenized.
“The architecture of Wall Street as we know it is going to be deprecated over five years and replaced with something called security tokens. If that’s true, we built the Nasdaq, the DTCC, and the New York Stock Exchange of that world. We spent the last four years and $100 million building it.”
Comparing a security token to a stock, Byrne said it has three advantages: 90% lower friction costs, complete transparency for the regulators, and immunity from market manipulation.
When asked about crypto mining, Byrne admitted the cryptocurrency is costly to mine, but mentioned the project Ravencoin, which Overstock invested in earlier this year. Ravencoin can reduce energy consumption because it can be scaled to 1000 times the capacity and block reward of bitcoin.
Overstock to Focus on Medici Ventures Unit
Overstock is now preparing to sell its retail business to focus solely on blockchain, Byrne told The Wall Street Journal last week. The company will instead concentrate on growing Medici Ventures, which comprises several startups, including its blockchain-based trading platform tZero.
“Being the guy who pedals along and makes $10 to $20 million a year wasn’t sustainable,” Byrne said. “[With Medici,] we have maybe several multibillion-dollar properties in there.”
Byrne believes tZero holds huge potential. In August, the Hong Kong-based equity firm GSR Capital invested as much as $400 million in Overstock and its tZero subsidiary. The platform, however, is not yet profitable. Its commercial launch is planned next year, but Overstock is already losing money because of it.
Medici Ventures has registered losses of $39 million in the first nine months of 2018, while Overstock lost $163.7 millionwithin the same period. Still, the company kept investing in blockchain startups, which include Bitsy, SiteHelix, and Chainstone Labs.
Tim Draper: ‘Bitcoin to Overtake Fiat Currency’
VC investor Tim Draper echoes Byrne’s optimism regarding the future of the technology. The billionaire has recently shared his cryptocurrency predictions, saying that bitcoin will reach $250,000 by 2022.
In a recent interview, Draper said he’s confident the global economy will soon switch to digital currency, making up two-thirds of the world’s currency value. Moreover, he believes the cryptocurrency will eventually overtake fiat money, as it will be easier for people to invest bitcoin.
Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.