Overstock Announces Public Share Placement on Blockchain Platform
Online retailer Overstock will become the first company in financial market history to place public shares on a platform completely based on blockchain technology.
The company announced the move during the 41st Annual International Futures Industry Conference in Florida on March 16.
Overstock and its founder Patrick Byrne intend to issue shares uncontrollable by any central authority. For that purpose, the company intends to use its own platform t0. While being a system for issuance, selling, buying and lending securities and bonds, it is pretty much the same as traditional exchange platforms with the exception that it is decentralized.
It means that the platform is managed by a distributed network of computers beyond the control of a single entity. Using cryptographic algorithms, those computers will mathematically verify all transactions and record them in a unified online ledger available for a check at any time.
However, the company’s shares will be available in two versions: the first will be placed on t0, while the second will be traded on traditional platforms like NASDAQ or NYSE.
Patrick Byrne said in a statement:
“This is yet another historic event – the creation of a security that will trade and settle entirely on a distributed ledger. I’ve said from the beginning that blockchain technology is going to change the world of finance forever, and we’re leading that charge.”
Overall, Overstock will issue 25.29 million preferable shares, with 1 million of them blockchain-based.
However, the company did not state the exact date of placement. Overstock received a permission to issue blockchain-based actions from SEC in December 2015.
Earlier this year, Patrick Byrne notified investors in a letter that the company had spent $8 million overall for implementing a securities trading system on blockchain, which is four times as high than the initially planned amount.
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