Earlier this week, speaking at his keynote address for Inside Bitcoins Las Vegas, Overstock.com CEO and passionate Bitcoin advocate Patrick Byrne made some exciting announcements regarding his ambitious project to overthrow the stock market. To wit, Byrne announced that Overstock would be partnering with Counterparty, a peer-to-peer financial services and smart contract platform, in order to build “Medici,” a decentralized, self-regulating commodity exchange based on block chain technology.
In a press release on their website, Counterparty said,
“This endeavor is already in motion and moving quickly. Both Robby Dermody and Evan Wagner have relocated to Utah to work on Medici, while Adam Krellenstein will continue working full-time on the Counterparty protocol itself. The Counterparty project is continuing to grow very rapidly, hiring new developers and building out new projects within the ecosystem, such as Medici itself.”
So what is Medici? What benefits would it actually have? Essentially, Medici would be a distributed cryptographic platform which would allow companies and individuals to create and sell cryptographic assets (which would work like cryptocurrencies from an end-user perspective). This would have a number of benefits: it would be international by design, allowing free trading of stocks and commodities between nations, and would make it much easier for private individuals to invest in companies without having to jump through artificial legal hurdles. It would also prevent a number of legal but abusive behaviors, including a practice called “naked short selling,” in which traders sell stock they don’t actually have, expecting the price to drop so that they can fulfill their obligation later inexpensively, something that Byrne has lobbied against in the past.
Medici, if it can be made to work well enough and if Overstock can get it past regulatory hurdles, could wind up being the place where real change happens, perhaps growing to dominate Bitcoin in importance. International markets are a place of enormous leverage, and making them better and freer could do enormous good for enormous numbers of people.
Patrick Byrne’s photo courtesy of Overstock
Counterparty logo via Counterparty website