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 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 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 million within 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 his cryptocurrency predictions, saying that bitcoin will reach $250,000 by 2022.
In a recent , 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.
A South Korean lawmaker has reportedly introduced a bill to promote cryptocurrency trading and the development of crypto exchanges. In addition to requirements such as capital, manpower, and internal systems, the bill proposes establishing a committee to promote and support crypto trading.
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Promoting Crypto Trading
Korean lawmaker Kim Sun-dong, a member of the National Assembly’s Political Committee, announced last week that he has initiated the Digital Asset Trading Promotion Act, local media reported. Seoul Finance elaborated:
‘The Digital Asset Trading Promotion Act’ includes a comprehensive plan for establishing a guideline for promoting the development of virtual currency exchanges and blockchain technology, tax reduction and exemption, measures against hacking damage, and prevention of market disturbances.
Kim Sun-dong.
Kim emphasized the need for a law dedicated to promoting crypto businesses to avoid companies leaving Korea, citing Bithumb as an example. He pointed out that even though crypto transactions in Korea accounted for a large percentage of the domestic stock market transactions at the beginning of this year, one of the largest crypto exchanges, Bithumb, was recently sold to a Singapore-based consortium.
He also noted that Japan has already completed legislative procedures to institutionalize crypto transactions and the U.S. has allowed the trading of cryptocurrency derivatives.
About the New Crypto Bill
The bill first defines “virtual content with an apparent value such as online money, points, game items and virtual currencies as digital assets,” the publication detailed. It also defines the operators dealing with them as digital asset trading companies. The news outlet added:
Those who want to operate a digital asset trading business should have more than 3 billion won [~$2.66 million] in capital, enough manpower, computerized systems, and physical equipment to be approved by the Financial Services Commission [FSC].
If an exchange is hacked and its customers suffer losses of crypto assets, the bill submits that the exchange must assume the liability for damage to the traders.
The publication added that some examples of industry promotion mentioned in the bill include the establishment of a digital asset trading committee, the promotion of research and development projects, financial support, professional training, and tax reduction. According to Metro Seoul newspaper, the committee will be tasked with resolving issues requested by the FSC such as setting standards and policies relating to crypto assets, as well as coordinating between relevant administrative agencies.
Kim was further quoted as saying:
The government is focusing only on the risk of virtual currency and concentrating only on the crackdown of illegal activities … In order to lead the global trend of blockchain technology development, it is necessary to prepare laws and regulations as soon as possible.
What do you think of this new Korean crypto bill? Let us know in the comments section below.
Images courtesy of Shutterstock, Seoul Finance, and the FSC.
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