Speaking at the Blockchain Agenda in San Diego last week, Overstock.com CEO Patrick Byrne warned that the R3-led blockchain consortium that counts the world’s largest banks as its partners is looking to outlaw the competition and the wider Bitcoin and blockchain community.
Bitcoin advocate and CEO of Overstock Patrick Byrne is wary of the R3-led blockchain consortium’s underlying agenda, whilst not trusting some of the banks that figure among the R3 blockchain. He cites reasons for suspicion, noting that some of the members within R3 intend to stifle competition and innovation among the Bitcoin community.
In quotes reported by Inside Bitcoins, Byrne said:
In the last couple of months, I’ve gotten suspicious that it [R3] is a mechanism — well, it doesn’t have a characteristic yet. The character is being formed, but there are members of R3 who want to use R3 as a mechanism to slow us down while they come up with their solution – ‘us’ meaning this whole [Bitcoin] community.
Byrne claims that regulatory authorities –so often a source of frustration for Bitcoin adopters and enthusiasts – aren’t the problem for the cryptocurrency and its underlying technology – the blockchain.
The problem is not the regulators. I think the regulators want this to happen. They don’t want to be under the thumb of Wall Street. They understand Wall Street has monopolistic power.
Byrne’s thoughts on R3’s endeavor to explore permissioned ledgers in creating their version of the blockchain were clear. He alleged that Wall Street is coming together to ensure that their version of the blockchain is the only one that will matter, in a regulatory way, in the future.
“What’s happening is Wall Street is trying to slow us down while they come up with their own version, and that’s, I think, R3,” said Byrne, who also co-founded T0, a trading platform that works via the blockchain and a subsidiary of Overstock that Byrne discussed in detail. “That’s a consortium that’s really going to be there – so Wall Street comes up with their own version, and then they’re going to outlaw [the competition and everyone else].”
So, really be alert for R3.
Byrne also made the surprising revelation that T0 was looking to join R3 at one point in time, an approach that was met with failure to do so despite T0 being at the thick of distributed ledger technology.
We tried to join, but they wouldn’t let us join – even though we’re far ahead of everybody.
Byrne has long been a vocal critic of Wall Street and has openly spoken about his love for Bitcoin and his disdain for central banking. His outspoken views may have been a factor in T0 not being accepted into R3. Byrne explained why he tried to join the commercial, permissioned ledger consortium in the first place.
[R3] will just be a way of protecting entrenched interests against competition. So, I would very much like to cooperate with R3, only to keep it from being pulled in that [self-serving] direction.
Although central and private banks along with governments aren’t exactly welcoming of cryptocurrencies such as bitcoin, 2015 has seen an increasingly mainstream trend of banks, brokerages and exchanges looking to tap into distributed ledger technology. What sets their endeavors apart from Bitcoin’s blockchain ledger is their focus on permissioned ledgers. Such ledgers are closed and restricted to participating members alone, unlike Bitcoin’s open blockchain where any miners or parties can transact.
Byrne sees R3’s powerful participants that includes the world’s leading banks to find ways to get regulators to approve their private blockchain through lobbying efforts and more.
..they will get their version [of the blockchain] launched, and they will –you know, these banks have regulators and senators on speed dtial. They’re going to call up and say, ‘Make it law that this is the standard system, and everyone has to conform to this system.
It’s clear that Byrne isn’t a fan of R3’s blockchain endeavors, although he did speak highly of IBM’s recent announcing of an open-source blockchain project, the Open Ledger Project.
Byrne’s comments at Blockchain Agenda San Diego comes days after the SEC approved Overstock’s plan to issue stocks through T0.com.
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Last modified: June 13, 2020 9:42 PM UTC