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When Overstock.com Inc. (Nasdaq: OSTK) Chief Executive Officer Patrick Byrne launched a wiki page to explore the possibility of a Bitcoin stock exchange, it was hard to imagine the project getting past the idea stage.
But Patrick Byrne is a man on a mission.
Driven by a deep mistrust of Wall Street, Byrne has announced the creation of a division within his company charged with making this dream a reality.
He's calling it "Medici" after the legendary family of Renaissance-era Italian bankers that pioneered the double-entry system of accounting.
"This could be as big, or bigger, than the Internet," the eccentric chief executive gushed to Wired earlier this month.
The basic idea is to create a stock trading system that uses Bitcoin's public ledger of transactions, the blockchain, to bypass Wall Street's institutions.
The wiki page helped Byrne find 13 groups already working on similar ideas. Byrne and his team quickly determined CounterParty was the best of the lot. So he hired two of the three co-founders.
That pair, along with several others, will become part of a new division within Overstock funded with 5% to 10% of Overstock's cash flow.
"We have, essentially, an open checkbook for them to build the crypto alternative to Wall Street," Byrne said in a speech given at the Inside Bitcoins Conference on October 6.
To navigate the many thorny legal and regulatory issues, Byrne said he has enlisted the services of blue chip legal firm Perkins Coie.
How far he gets is another question, but make no mistake – this man is serious.
"The Most Hated Man on Wall Street"
The roots of Byrne's crusade go back to the 2002 Overstock IPO, when he became aware of some unsettling practices on Wall Street.
By 2005 he became notorious for accusing Wall Street of "naked short selling." In naked short selling, a trader doesn't borrow shares to sell on the market – they simply sell shares they don't have. Those doing it, Byrne said, were manipulating stock prices for their own gain.
Byrne also accused Wall Street of corruption and of having ties to organized crime. His persistent attacks soon made him "the most hated man on Wall Street," a title he still wears with pride.
Byrne has taken it upon himself to purge the bad actors from the system. Or as he puts it, "drag Wall Street behind the barn and kill it with an ax."
While a Bitcoin stock market is a certainly a long shot, investors would reap several benefits if Byrne somehow pulls it off.
Here's what you can expect…
About the Author
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.