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Could a Bitcoin stock exchange become a reality?

by , 23 October 2014

The CEO of NASDAQ-listed Overstock.com recently launched a wiki page to explore the idea of a Bitcoin stock exchange. Patrick Byrne came across 13 other groups working on similar ideas.

He's now created a division within his company to drive this idea from a dream into a reality.

So what's the idea behind the Bitcoin stock exchange? And what would be the advantages of such an exchange?

Let's take a closer look…


What would a Bitcoin stock exchange mean?


The idea behind this Bitcoin stock exchange is to create a trading system for shares that uses Bitcoin’s public ledger of transactions, the blockchain, avoiding the need for the institutions linked to the stock markets.

Through his wiki page, he whittled through the groups and decided CounterParty was the best. He employed two of its three co-founders, David Zeiler in Money Morning US explains.

They joined his team of people working on building an alternative to the stock market. The division secures between 5% and 10% of Overstock’s cash flow.

A Bitcoin stock market is a long shot. But if it did become a reality, there would be many benefits for investors.


The need for a Bitcoin stock exchange


Mr Byrne thinks that Wall Street has flaws. And he thinks it needs fixing. He thinks the current way that Wall Street works isn’t trustworthy and is subject to manipulation.

He believes the introduction of a Bitcoin stock exchange would remove these problems. In his words, he says it would allow “a way to have a peer-to-peer, one-to-one settlement system that doesn’t run through any centralised institution that the bad folks can’t hijack”.

He sees a Bitcoin stock exchange running in parallel to the existing stock markets. It means that companies could decide to list on the Bitcoin stock market as well as the NASDAQ or New York Stock Exchange.

Mr Byrne thinks it offers a good alternative for start-up companies. The listing process would be cheaper than listing on a traditional stock exchange. He wants to make the whole process more efficient.

The investor who believes a Bitcoin stock exchange could indeed become a reality could invest in Overstock.com. As the company behind the initiative, if it does take off, the stock’s share price will benefit.

So there you have it, why a Bitcoin stock exchange could become a reality.

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Could a Bitcoin stock exchange become a reality?
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