It would appear that the formation of the tZero project by retail giant Overstock may not have been such a crazy move after all. The platform has had a difficult beginning, with costs surging to almost $170 million, but Overstock founder, CEO and majority shareholder Patrick Byrne has indicated that it’s time to give up the retail game and concentrate solely on cryptocurrencies.
Byrne made the announcement in an interview with the Wall Street Journal. He indicated that the company is going to focus exclusively on tZero, which is “actively working to develop new technology that will help make markets more efficient, more transparent, and more liquid.”
The executive added that it isn’t “sustainable” to be “The guy who pedals along making $10 to $20 million a year.” He added that tZero has the potential to offer a number of multibillion-dollar operations under its umbrella.
This isn’t just a pipe dream, either. The sale is already in the works and the entire retail business – including Overstock.com, O.co and the company’s Worldstock program – are to be sold off by next February. Byrne didn’t name names, but there would be significant interest from a plethora of retailers, including Amazon and Walmart.
Overstock isn’t exactly hurting for cash. It sold 2.8 million shares last quarter, Overstock raised $94 million and raised an additional $130 million when it launched the initial coin offering (ICO) for its tZero cryptocurrency. However, the launch of tZero has caused a substantial decline in Overstock’s stock price. It has gone from a 2018 high of $87 to under $17 last Wednesday. When the news hit the airwaves that Overstock would drop retail for crypto, the company’s stock climbed 23.26% and, as of this writing, is just under $21.
The tZero platform is an alternative trading system (ATS) that is regulated by the U.S. Securities and Exchange Commission (SEC). It matches buyers and sellers, instead of working through broker dealers, to securities and was launched to offer an alternative to NASDAQ that is transparent and immutable.
Overstock began accept cryptocurrency as form of payment since 2014, making it one of the first large retailers to do so. The shift from retail to full-time crypto is a huge step, and shows that – despite current downturns in crypto – digital currency still has a very bright future.
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Overstock.com, Inc., through its wholly-owned subsidiary Medici Ventures, is investing in VinX, a blockchain company that tracks wine futures, the Associated Press reported.
The collaboration is meant to improve supply chains in the wine industry. It is “conservatively” estimated that 20% of the wine in the world is labeled fraudulently.
Overstock founder and CEO Patrick Byrne said, “[T]he wine industry has difficulty scaling its middlemen-heavy systems in parallel with the growing demands of an increasing global market. VinX’s steps in tokenizing wine futures while allowing wine enthusiasts to know without a doubt that the bottles they purchase are filled with authentic wines will position the entire industry as a model of a new global economy that replaces old boys’ networks with frictionless trust through technology.”
VinX co-founder and CEO Jacob Ner-David, said, “VinX is democratizing the capital structure of the wine industry by bringing consumers in direct contact with producers early in the wine-making cycle… [B]ecause we are registering all wine futures as tokens on a blockchain, we are bringing a powerful validating force that will go a long way toward reducing fraud.”
VinX sees a $200-billion “opportunity size” in the market for the wine trade using distributed ledgers. The startup began pre-sale of its ‘Vin’ token, which runs on the Zen Protocol blockchain, in the second quarter of this year.
On its website, VinX projects the end of its first harvest season in the first quarter of 2019, with an initial group of wineries participating.
The company foresees being able to handle “thousands” of wineries who want a more direct connection to their consumers, through the trade of futures. It says that in the current distribution model, wineries receive only one-third of retail revenue.
Medici Ventures is also looking at issuing a blockchain-based currency for the Netherlands Antilles, with which it has signed a memorandum of understanding.
Among Overstock’s other blockchain ventures is tZero, a regulated exchange for token sales, which is seeking regulatory approval.