CEO Envisions Bitcoin Stock System to "Wipe Out" Wall Street

Could a Bitcoin stock trading system be the cure for the many transgressions of Wall Street?

Overstock.com (Nasdaq: OSTK) CEO Patrick Byrne thinks so.

Last month he created a wiki page on the Internet to solicit help in creating a decentralized, purely digital stock trading system that would use Bitcoin's blockchain – the mechanism that records and verifies all the transactions – as its foundation.

"You would have an instant, frictionless market, while having the added benefit of wiping out a whole parasitic class of society – that is, the whole financial industry," Byrne told Wired in February.

Besides the Big Banks, Byrne told CoinDesk the system would bypass the Depository Trust & Clearing Corp. (DTCC), which provides clearing and settlement services to the U.S. capital markets.

"It's a corrupt organization that shows [the] influence of organized crime," Byrne said.

It's no surprise Byrne would seize upon a Bitcoin stock system as a weapon – this is not the first time he's targeted the powers of Wall Street…

A Legacy of Fighting Wall Street

Back in 2005, Byrne became notorious for his accusations that Wall Street was using naked short selling techniques to manipulate the prices of his and other companies' stock for their own gain. In naked short selling, a trader doesn't borrow shares to sell on the market – they simply sell shares they don't have.

In 2007 Byrne filed a $3.48 billion lawsuit against a dozen of Wall Street's biggest players, including Goldman Sachs Group Inc. (NYSE: GS), Merrill Lynch, Citigroup Inc. (NYSE: C) and Deutsche Bank AG (NYSE: DB). That suit is still pending.

Fast forward to last year, when Byrne became intrigued with Bitcoin. Unlike many in the financial community, the unconventional CEO immediately saw great potential in the digital currency.

Overstock.com started accepting Bitcoin as payment in January – the first major retailer to do so.

But he also recognized that the underlying Bitcoin technology could serve purposes beyond mere payments.

A Bitcoin stock trading system would take his fight against Wall Street to an entirely different level.

And for those who are sick and tired of Wall Street's dangerous games – the high-frequency trading that skims money away from retail investors, the thinly disguised manipulation of stock and commodities prices, the insane risks taken in a gambit for quick profits – a system that relegates these bad actors to the ash heap sounds very tempting indeed.

Byrne has made some promising first steps in making this Bitcoin stock trading system a reality, but he also faces some daunting challenges…

David Zeiler

About the Author

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Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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