Patrick Byrne, CEO of US online retailer Overstock.com, unveiled tØ today at the headquarters of the major US stock market Nasdaq in New York today.
Byrne also unveiled a “big surprise” in the form of the platform’s Preborrow Assured Token, which Byrne suggested would democratize securities lending. The product, he said, is already being used in an enterprise pilot program, and is the subject of interest by major banks.
Speaking to the crowd, Byrne explained the larger goals of the new platform and why he believes it to be a milestone in the history of trading:
“We built a platform and we’re launching tØ.com, where the trade is the settlement. That’s the big disruptive idea, the entry is both the trade and the settlement, it doesn’t have to be a separate process.”
Elsewhere, the event kicked off with talks by tØ co-founder Johnny Tabacco, Jones Day partner Lee Armstrong and Overstock president Stormy Simon, all of which sought to emphasize the innovative nature of the project and the genius of Byrne, who was described as a maverick, visionary and philosopher.
“We had built a system that allowed couches to be hand delivered in a box, and back then, that was a hard conversation, helping retailers see how their business would be changed in the future,” Simon said in her remarks. “Today shipping couches doesn’t feel like a big deal.”
Despite his staunch support for the bitcoin network, Byrne was also keen to stress that tØ intends to be ledger agnostic, meaning it can work with any decentralized ledger, he said, with a few weeks of integration.
Mentions of bitcoin were noticeably absent from most of the talk, even in references to the enterprise testing of blockchain-based trading systems such as those being developed Nasdaq, which explores how the bitcoin blockchain could be used to trade shares in private companies.
All attendees at the event, however, did receive $25 in bitcoin, an announcement that followed the main presentation.
History of trading
Following the opening speakers, Byrne used his talk as a forum to discuss changes in the nature of Wall Street trading systems, using simplistic analogies as a way to showcase the larger innovations that could be unlocked by distributed ledger technologies.
For instance, Byrne used an example where a grandmother sought to purchase a baseball glove from a neighbor, noting how in this instance trade is conducted directly and without any intermediaries.
Byrne then evolved the example to showcase how the same trades have been conducted by Wall Street, from the time of bike messengers, until later when these physical messages were replaced by computer systems, and ultimately, different representations of these trades.
“True settlement would be, Grandma wants to buy a catcher’s mitt and she gives money for the sale. Imagine that could be put on a public ledger,” Byrne said.
“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.”
Rather than pose this innovation as threatening to Wall Street business models, Byrne sought to stress that tØ intends to license the product to enterprise trading firms.
“We want to work with you,” he continued. “We think this is a much better system.”
Byrne also sought to distance tØ from other competitors who are looking to sell blockchain-based products to the New York financial market, suggesting some may fall short of delivering on what he considers the true innovative nature of the technology.
“This is all about true settlement, there’s no need for net settlement,” he said. “If people come along and say they’re introducing these crypto-based platforms, ask if it stays net. Other people working on such systems, some of the ones I know about will keep settlement net, I’m suspicious of why you would even do that.”
Building on this narrative, Byrne suggested that real gross settlement would “make impossible” certain wrongdoings that have become common in financial markets.
He also strived to frame real-time settlement as an original goal of Wall Street, one that is finally being made possible by distributed ledger technology, concluding:
“That is what we’ve built at tØ.com and that’s the original version of Nasdaq, a peer-to-peer (P2P) settlement system, this just happens to be based on new technology.”
Images via Overstock