Author Topic: Overstock.com Assembles Coders to Create a Bitcoin-Like Stock Market  (Read 20138 times)

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Offline JoeyD

What TheFu.. said, and eagleeye.

If you think about it, getting a whole range of bitYourPharmaceuticalBrandOfChoice on bitsharesx would be HUGE. It would finally get the very much needed price discovery solved and get some real honest price-fighting going. Plus they love USD like no other, they'd love bitUSD.  Talk about undercutting the banks, that would be taking away their #1 customer.  Also think about how messed up that market is, if you're not part of the in-crowd the resident pharmaceutical company can even get governments to declare war on its competitors.

BUT, without the onramp thing solved then it would be no more than just pricediscovery. Maybe the OpenBazaar might solve the onramp thing, you need to be sure that you get your sugar instead of something horrible like Aspartame, man that stuff messes up your brain.
« Last Edit: October 07, 2014, 08:58:53 am by JoeyD »

Offline CLains

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Meanwhile we can use all the legal help we can get.  It was gratifying they picked the same law firm we have been working with all year.  Now our law firm will be properly funded to find all the answers we all are seeking.

And it's nice to let someone else be the tall poppy with the regulators! :)

This is very good news.  +5%

The fact that we now have a centralized representative in Patrick Byrne is great. He can go on TV, give the speeches, speak to the politicians and regulators, deal with the legal situations which we are bound to have to face.

 +5%

So this is good for us, they chose a competitor that isn't a threat.   Had the chosen Nxt then I would have been more concerned.   They chose a competitor that will be too SLOW for real trading and too expensive and uncertain.

True! If they are committed to staying on bitcoin what can we say..

Offline eagleeye

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I agree with theFu, bitCOCAINE, it will get the headlines.


Offline Riverhead

How can you trade something like bitAAPL or other virtual stocks on bitshares, won't the peg break whenever dividends are issued?

Dividends are usually factored into the stock price as soon as they are announced.

Offline Rune

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How can you trade something like bitAAPL or other virtual stocks on bitshares, won't the peg break whenever dividends are issued?

Offline CLains

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“Building this—and being the company that owns this—can be more valuable than Overstock,” he says. “It can be more valuable than Alibaba.”

He is merely recreating what already exists and consequently this in not a competitor at all - his platform is explicitly centralized and designed to extract profit for the 'owners'.

This explains why he did not jump on Bitshares: he wants to own Wall Street. The irony.

Sad, I had high hopes for Patrick.

He seemed to understand that centralization is the root of the Wall Street/Big Bank evil he frequently rails against.

Ah well.

Yup. The wording here is ...

Offline bluebit

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Do we even need centralized companies to list shares on BTSX? Not really. And it takes time. BitUSD is a larger market. just wait till the on ramps are put in place :)

BitUSD, BitOil, BitGold, BitSilver, BitEuro, BitYEN, ...... Do you guys realize how much money could be traded on BTSX once it takes off?
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busygin

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So this is good for us, they chose a competitor that isn't a threat.   Had the chosen Nxt then I would have been more concerned.   They chose a competitor that will be too SLOW for real trading and too expensive and uncertain.

Yeah, trading the US equity market on BTC blockchain will be like running Google on a ZX Spectrum computer. Not to mention that bitcoin developers want to discourage what they call non-standard transactions. Maybe they move to Dogeparty at least  ;)

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BitShares X is competing with NASDAQ. Its a securities exchange...

Offline luckybit

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So if you have appl shares on nasdaq how would the proposed system transfer them to your counterwallet and then your bitappl (btsx bridge)? I would think you need to issue totally new assets not found on nasdaq for a long while and maybe one day appl and the likes will see value in using overstocks exchange instead of nasdaq because thats where the trading volume is... It would not be feasible i think to havd something like appl trading on the exchange because of the conversion. I GUESS it poses the general question and a bigger one that what would it take the interbank to trade on a decentralized exchange when they simply dont have to they get all orderbook info others cant see and they wouldnt have these advsntages on something like bitshares... Maybe once big companies like overstock and bigger decide that hey i dont want my stock to be ruined by quant trading bots frontrunning large trades and ruining confidence... And later maybe they will want to settle foreign accounts right there on the same exchange because of lower fees then it might make sense... Long ways away still and id think there is alot of time for either platforms to collaborate or even research how to solve the incentive issues so they are good to go when the big caps start to move in... If they do

If someone is willing to sell their AAPL for cash, Bitcoins or anything else then you can have a bridge. The entity purchases the security from the standard stock market and then sells via the bridge.

It's not really hard to set up. The regulation is the only hard part. BitPay is set up so people can use it and you could do something similar for stocks.
But people may not want to sell their positions to rebuy somewhere else because that is a high transactional cost via spread. I dont think you can bridge nasdaq for one they wont let you. So in essence you are saying nasdaq can be an entry gateway into the overstock exchsnge and thus later on btsx? I doubt nasdaq will give up exiting their system to a competitor doesnt make much sense.

People will pay whatever the fees or costs are for diversification. NASDAQ doesn't have to give up it's system because Bitshares X doesn't compete with NASDAQ. Overstock is competing with NASDAQ.

Bitshares X is in a position where it can integrate with any Gateway including the NASDAQ Gateway. If I had a position of BitAAPL and I wanted to turn it into legal securities then I would send the value to the Gateway where that value would be exchanged for the legal securities which then would be legally transferred to me.

So it would be no different from purchasing legal securities with Bitcoin or cash. The same process could apply to any kind of asset which can currently be purchased with Bitcoin so really the point is to make the process streamlined and do it behind the scenes like how BitPay does it.

Even if you are right and NASDAQ fights against Overstock it doesn't mean NASDAQ will be fighting against Bitshares. Anyone who can sell stocks can sell stocks and they can sell stocks for Bitcoins or cash. So the only difference will be how many processes it takes to get them to sell the stock. BitPay proves that if you make the process transparent and streamlined then merchants and customers (stockholders and buyers) need not know Bitcoin, BitUSD, or BitAssets are involved at all.

This would make Bitshares X a virtual exchange which exists as a parallel market rather than an actual securities exchange like NASDAQ or the Overstock idea. This means NASDAQ and Overstock have to go through legal processes, take on legal risks, while we do not. The regulation for us would happen if we want to exit the Bitshares X ecosystem and make our virtual assets into legal assets.

Answer this: If you had millions of dollars worth of Bitshares X because you were a smart investor so that now you can cash out and be considered a "sophisticated investor", own the legal assets, have the legal protections, you wouldn't diversify out?  I think there will be demand to diversify out once the market cap reaches a point where some people trading these BitAssets will want the real thing.

I think it would be more useful for smaller companies. Penny stocks. Think BitShares Me. Bigger, publicly traded companies are subject to way too many securities restrictions and you are right that the exchanges will not allow them to float stock elsewhere. Patrick Byrne doesn't have the patience for dealing with that and I'm not sure why publicly traded companies would want this anyway. If they could figure out a way to do bond notes, that would be another possibility, but it might get into lending also. Whatever they try, this will be squarely in the sights of regulators.

They have the money to try it. The GPL wasn't guaranteed to work either but it was tried and now we have free software.
« Last Edit: October 07, 2014, 05:53:34 am by luckybit »
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Offline donkeypong

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I think it would be more useful for smaller companies. Penny stocks. Think BitShares Me. Bigger, publicly traded companies are subject to way too many securities restrictions and you are right that the exchanges will not allow them to float stock elsewhere. Patrick Byrne doesn't have the patience for dealing with that and I'm not sure why publicly traded companies would want this anyway. If they could figure out a way to do bond notes, that would be another possibility, but it might get into lending also. Whatever they try, this will be squarely in the sights of regulators.

Offline jsidhu

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So if you have appl shares on nasdaq how would the proposed system transfer them to your counterwallet and then your bitappl (btsx bridge)? I would think you need to issue totally new assets not found on nasdaq for a long while and maybe one day appl and the likes will see value in using overstocks exchange instead of nasdaq because thats where the trading volume is... It would not be feasible i think to havd something like appl trading on the exchange because of the conversion. I GUESS it poses the general question and a bigger one that what would it take the interbank to trade on a decentralized exchange when they simply dont have to they get all orderbook info others cant see and they wouldnt have these advsntages on something like bitshares... Maybe once big companies like overstock and bigger decide that hey i dont want my stock to be ruined by quant trading bots frontrunning large trades and ruining confidence... And later maybe they will want to settle foreign accounts right there on the same exchange because of lower fees then it might make sense... Long ways away still and id think there is alot of time for either platforms to collaborate or even research how to solve the incentive issues so they are good to go when the big caps start to move in... If they do

If someone is willing to sell their AAPL for cash, Bitcoins or anything else then you can have a bridge. The entity purchases the security from the standard stock market and then sells via the bridge.

It's not really hard to set up. The regulation is the only hard part. BitPay is set up so people can use it and you could do something similar for stocks.
But people may not want to sell their positions to rebuy somewhere else because that is a high transactional cost via spread. I dont think you can bridge nasdaq for one they wont let you. So in essence you are saying nasdaq can be an entry gateway into the overstock exchsnge and thus later on btsx? I doubt nasdaq will give up exiting their system to a competitor doesnt make much sense.
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Offline luckybit

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So if you have appl shares on nasdaq how would the proposed system transfer them to your counterwallet and then your bitappl (btsx bridge)? I would think you need to issue totally new assets not found on nasdaq for a long while and maybe one day appl and the likes will see value in using overstocks exchange instead of nasdaq because thats where the trading volume is... It would not be feasible i think to havd something like appl trading on the exchange because of the conversion. I GUESS it poses the general question and a bigger one that what would it take the interbank to trade on a decentralized exchange when they simply dont have to they get all orderbook info others cant see and they wouldnt have these advsntages on something like bitshares... Maybe once big companies like overstock and bigger decide that hey i dont want my stock to be ruined by quant trading bots frontrunning large trades and ruining confidence... And later maybe they will want to settle foreign accounts right there on the same exchange because of lower fees then it might make sense... Long ways away still and id think there is alot of time for either platforms to collaborate or even research how to solve the incentive issues so they are good to go when the big caps start to move in... If they do

If someone is willing to sell their AAPL for cash, Bitcoins or anything else then you can have a bridge. The entity purchases the security from the standard stock market and then sells via the bridge.

It's not really hard to set up. The regulation is the only hard part. BitPay is set up so people can use it and you could do something similar for stocks.
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Offline jsidhu

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So if you have appl shares on nasdaq how would the proposed system transfer them to your counterwallet and then your bitappl (btsx bridge)? I would think you need to issue totally new assets not found on nasdaq for a long while and maybe one day appl and the likes will see value in using overstocks exchange instead of nasdaq because thats where the trading volume is... It would not be feasible i think to havd something like appl trading on the exchange because of the conversion. I GUESS it poses the general question and a bigger one that what would it take the interbank to trade on a decentralized exchange when they simply dont have to they get all orderbook info others cant see and they wouldnt have these advsntages on something like bitshares... Maybe once big companies like overstock and bigger decide that hey i dont want my stock to be ruined by quant trading bots frontrunning large trades and ruining confidence... And later maybe they will want to settle foreign accounts right there on the same exchange because of lower fees then it might make sense... Long ways away still and id think there is alot of time for either platforms to collaborate or even research how to solve the incentive issues so they are good to go when the big caps start to move in... If they do
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Offline Overthetop

The overall announcement was very positive.  Overstock is laying the technical requirements for a crypto-system and the work they are doing will pave the way for all of the competitors.   

The fact that they went with counter party means they are dead in the water and will eventually have to migrate to a different foundation.   Why did they go with counter party?

1) They cannot see any other crypto unseating Bitcoin is the digital currency of choice
2) They wanted to securely trade against Bitcoin
3) Their team was available for a buyout. 

Our entire focus of this conference was that Bitcoins real competitor is BitUSD and the fact that BitUSD can be marketed to the masses where as Bitcoin never will be.   By the time Overstock actually releases a crypto-equity BitUSD will have a significant presence in the market.   Traders are going to demand trading against BitUSD and eventually Ovestock will want to list their stock on an exchange that can trade against real currencies.

So this is good for us, they chose a competitor that isn't a threat.   Had the chosen Nxt then I would have been more concerned.   They chose a competitor that will be too SLOW for real trading and too expensive and uncertain.

Their roadmap must include issuing trust-based USD assets on counter party.   Counter party does have "contract for difference" with "price feeds" and thus does provide some hedging options.  It will be interesting.

The BTSX wallet has been built quickly and has not been optimized.  The slowness you see today can be greatly accelerated with a few optimizations to how things are cached on the Javascript side. 

I am relieved that we can focus on BitUSD because it is clear that Overstock is now committed very strongly to Counter Party at this point.   This is a "war" and this battle just shows that most people do not yet get BitUSD... but they will soon enough.

 +5%

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