When it comes to opportune investments and measured risks, Patrick Byrne has already showed the knack for right pickings. He launched Overstock.com in 1999 after leading two small companies one of which now belongs to Warren Buffet’s Berkshire Hathaway. The ecommerce giant went to gross revenue of $ 2 Billion per annum, while achieving profitability in 2009. From 2014, Byrne started to take interest in crytpocurrencies and was quick to invade the Blockchain space. In January 2014, Overstock became the first major online retailer to accept Bitcoin. Let’s look into how Patrick Byrne has progressed in the field of Bitcoin and Blockchain:
Overstock and Bitcoin:
Behind accepting Bitcoin for payment, which took many people in the world of finance by shock, Byrne had strong business reasons. Bryne believed that there were large numbers of holders of bitcoin who were eager to patronize firms that will accept this form of payment, but weren’t able to do so due to limited options. Hence by being the first major online retailer to accept bitcoin, Overstock can tap into a significant group of loyal consumers. Hence as a result, there will be significant growth in the share of the overall market.
Launch of tee-zero:
Banking on the applications of Blockchain Technology, Byrne launched a securities trading platform. The platform was revealed formally at the headquarters of the major US stock market Nasdaq. During the launch, Byrne advocated that the platform’s surprise element is the Preborrow Assured tokens. He believes that this feature would democratize securities lending. The disruptive idea behind the platform is the entry is both the trade and the settlement; it doesn’t have to be a separate process. This would incredibly speed up the settlement process and that is why major banks have taken keen interest in this platform.
“Imagine this ledger is cryptographically protected, public and transparent. Grandma’s money can be turned into US dollar coins and when she buys the catcher’s mitt, we’re wiping out one coin and replacing it on another ledger.”
Byrne’s most recent announcement in the direction of blockchain adoption came in the field of democratic elections. Medici Ventures, a blockchain-oriented subsidiary of Overstock.com, has announced it will add SettleMint to its portfolio of investment companies. SettleMint is a Belgium-based fintech firm. It most recently released SettleMint Ballot Box, an application for recording voting on the bitcoin blockchain.
On this particular move, Byrne commented:
“Blockchain is the perfect technology for achieving higher confidence in the democratic process, for everyone.”
Bitcoin is primarily a medium of exchange that would replace the existing monetary system. Owing to the low transaction fee, non-requirement of a third party and ease of transaction it is being looked as a really good alternative for fiat currencies. Bitcoin powered by ledger based technology, enables the transactions to be peer to peer and anonymous. Ironically the ledger based technology is finding applications in the field of financial services. The transformative potential of Blockchain technology has made it very viable for quick adoption in many sectors. Let’s look into how Blockchain is transforming fintech:
Blockchain in Trade Settlement:
One of the most important aspects of Trading is the settlement of trades and the balancing of money. After a trade, it would take sufficient amount of time to cross check the trades and validate them. Transfer of funds to the stake holders’ accounts takes place on completing the validation, . Typically this process would take atleast 12-28 days with the money held up during this period.
This would be loss of investment opportunities and Blockchain technology has a solution for it. CEO of overstock.com Patrick Byrne, introduced ‘Tee zero’ a securities trading platform that drastically reduced settlement time for equity trading. The platform banks on Blockchain technology and has great flexibility in trade dealings. Major banks have been working on a similar platform for credit card settlements and operations.
Blockchain for cross border transactions:
Cross border transactions have a long wait period before yielding to utilizable value. Cross border transactions across banks are no exception to this. To avoid the exposure during this wait period banks opt for multiple hedging strategies.
US based startup R3, along with 12 global banks, created a cross-border payment system. Financial technology company Ripple developed this system, totally powered by blockchain technology. This alliance was able to successfully complete testing of transactions over this network and is soon to put this into application.
Blockchain for Mortgage valuations:
Hong Kong banks are reportedly developing a system that uses blockchain tech to share information about mortgage valuations. Bank of China and HSBC are among a group of lenders in the region that are testing the system. If fully realized, the system will include participants from Hong Kong, who will contribute valuation data. While the system is still under testing, the proposed mortgage valuation system looks promising. Bank of China will be integrating live inside their operations sometime next month. This is set to change the face of mortgage valuations and ease the operational burdens on the banks.