The shared goal is to build a cutting-edge stock market on top of the Bitcoin blockchain, and help Bitcoin do for Wall Street what it has already begun to do for payments.
The blockchain has proved very well suited to the exchange of digital currency. But what about exchanging shares of public companies? Patrick Byrne, a longtime critic of Wall Street, is actively pursuing a model for trading stock on a peer to peer basis using the Bitcoin protocol. In his talk, Byrne discussed the challenges and opportunities presented by a decentralized stock exchange.
By harnessing the power of the Bitcoin network, Counterparty creates a robust and secure marketplace directly on the Bitcoin blockchain, extending Bitcoin’s functionality from a peer-to-peer payment network into a full fledged peer-to-peer financial platform.
Counterparty emerged as a preeminent Bitcoin 2.0 and cryptosecurities technology platform. In the Counterparty protocol traditional financial instruments are implemented as self-executing smart contracts, thereby eliminating the risk and the need for an intermediary party. Network participants can engage in asset exchange, binary options, or contracts for difference directly with peers, trust-free and immediately.
CCN asked a few questions to Counterparty co-founder Robby Dermody, who relocated to Utah to work on Medici:
Why “Medici”? Is Patrick Byrne going to play Lorenzo the Magnificent for Bitcoin innovation?
One could say that the Medici Bank was the birth of modern banking and finance. We feel that this is the birth of the next generation of finance, built around blockchain technology and cryptography.
Why is Counterparty an ideal technology for a blockchain-based stock market?
Counterparty builds on Bitcoin and is out working and functional today. The team has proven experience and an ability to deliver, and the platform has already been showing the most significant adoption of any of the “2.0” platforms.
Will Medici be a “CounterDAQ,” an alternative underground version of the stock market for small investors and Bitcoin-focused companies, or does it aim to be a real stock market for grown-ups and big business like NYSE and NASDAQ?
More of the latter. Medici will broker legitimate shares in companies, on the blockchain. There will be no specific Bitcoin industry focus, although Bitcoin companies that fit the listing requirements may opt to list on the platform. Beyond that, I cannot comment.
What about the SEC and over-regulation?
The regulations are regulations, and with Medici, we have to do this above board and comply with the applicable laws already on the books. However, we have a strong interest to work with the regulators and help them evolve the current body of regs to in a way that helps to remove unnecessary barriers to blockchain-based finance.
So you are moving to Salt Like City? Are you a Mormon?
I am living in Salt Lake City today (just saw a moose on my back deck this morning! — I am living between SLC and Park City). I am not a Mormon myself.
Images from Counterparty, manaemedia and Shutterstock.