Tuesday, June 23, 2015

Overstock.com sets bond with Bitcoin technology – Technology Review

The crypto currency Bitcoin is suitable for far more than fast and decentralized Pay without state control: A militant online Dealer she wants now to use for settlement of securities transactions.

Patrick Byrne, CEO of online retailer Overstock.com, is no ordinary businessman. He has a doctorate in Philosophy, a black belt in Taekwon-do, trying, among other things as a professional boxer. Combative, he was also, as short sellers mid-2000s because of suspected accounting errors, the stock of his company attacked. He swore at them as criminals, spoke of a wide-ranging conspiracy and provided years of legal disputes with hedge funds and investment banks

Much therefore not, but has remained Byrnes rejection of the financial establishment on Wall Street. And he continues to do everything possible to contribute to its weakening: the beginning of 2014 began Overstock first major retailers to accept payments in alternative crypto currency Bitcoin. In the autumn of the same year, he launched a wiki to prepare issuing and trading of securities using Bitcoin technology. In this June, Overstock reported the first concrete result of these efforts. The company offered selected professional investors with a “digital corporate bond” to, in fact for the Bitcoin block chain is used

“The crypto revolution is on the Wall Street arrived, “said Byrne was a quote for the occasion – and invested the same $ 500,000 in its own bond. In fact, even more independent experts see potential for Bitcoin and similar technologies to revolutionize the monetary and finance. For example, Blythe Masters, a former investment banker who now Finanztech the startup Digital Asset Holdings directs: “I would take about as seriously as you would the concept of the Internet in the early 1990s should be taken seriously,” she said at a Conference in early June.

After all, unlike previous systems come Bitcoin and Co. without central instances. Neither central banks nor large settlement service providers Technically it needed, because the confirmation and verification of transactions carried out by the computer of the user himself. Bitcoin block chain can be thought of as a giant distributed register in which the transaction history of each unit is held the cryptocurrency , Whether it is genuine, can with the help of cryptographic methods of each user are determined.

The technology is suitable for a good for transfers of funds across borders or in areas where there is still no developed banking infrastructure. If a Bitcoin user to another money (or Bitcoins) want to send, it is in its software at its address and signed the transaction with its private key. The rest of the connected computer check this data and then pass it on until the information has spread throughout the Bitcoin network. If enough of these transactions are met, they are combined into a new element of the block chain. As an incentive and reward for their efforts in verifying computational work, participating computers new Bitcoin units.

While the beginning was mainly the function of Bitcoins as an alternative means of payment in the foreground, the focus moves now to other uses of the block chain as a decentralized trade repositories: So how can of the protocol Bitcoins transferred itself, so it can work with slight modifications for the – be used transfer of other assets – are also decentralized verifiable. If you have a certain Bitcoin unit, so also has the related property rights. Thus

This is where Byrne will start with its crypto-bond. Already this April he had a prospectus for the issue of shares worth up to 500 million dollars “on a cryptographically secured distributed register system” filed with the US Securities and Exchange Commission – for a kind of Bitcoin IPO so. The Authority should spray “holy water” on its plans for digital assets, it said at the time. Previously, Overstock had already participated in the Alternative Trading System Pro Securities, which extended its business purpose promptly to the trading of securities on block chain technology.

The approval by the SEC is still pending, but with the non-approved emission the private placement drives Byrne in the meantime his mission even further. The volume was 25 million, the interest rate is dependent on the development of sales at Overstock up to 7 percent. In an interview Byrne later stated, the emission was oversubscribed, and at a lower interest rate it would take a further crypto bond like once again up to 200 million dollars registered capital

. ( Sascha Mattke ) <- author-data marker end ->

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