Video - Crypto Equity With Patrick Byrne, Overstock CEO
Patrick Byrne believes the financial markets are rigged. He hopes to use Bitcoin 2.0 platform, Counterparty, to create a transparent, peer-to-peer alternative to the current system. His goal is “to take Wall Street behind the barn and kill it with an ax.”
Magenta Harley: This is TheProtocol.TV.
Patrick Byrne: Nobody watching this video has any actual copyrights stock. You think you do, you do not. You have a daisy chain of contractual rights against somebody else who actually own that property.
Magenta Harley: Patrick Byrne is an economist pioneer and Chairman and C.E.O. of Overstock.com. Overstock was the first major internet retailer to start accepting Bitcoin for payment. Mr. Byrne has famously been labelled at the Scourge of Wall Street. For his vocal campaign against what he believes a Criminal Elements manipulating the financial system. Now, he is partnering with Bitcoin 2.0 platform, Counterparty. In hopes of building a transparent competitor to the stock market. His goal is "to drive Wall Street behind the bond and kill it with an axe." Here is an exclusive interview with Patrick Byrne.
Patrick Byrne: Crypto equity is the use of the blockchain to create a parallel universe. That parallels the financial system as we know it. Wall Street as we know it, all these -- and remember that these institutions we have in society like Wall Street, like government they didn't come to us chiseled on stone from on a mountain top. They're just institutions that we set up to accomplish certain net. Well now, we can accomplish those same ends using the technology of the crypto revolution and we don't need a whole bunch of functions of those institutions have now been -- or going to be disrupted. So, it's important, it's not so much important to Overstock to do it but it's important to the world that it be done. And I think that it's clear that anybody was awaked. Those centralized institutions have got corrupted and as a result republic is well on its way to an advanced state of oligarchy and the strength -- the oligarchy draws its power off the corruption of central institutions like the DTCC and the Federal Reserve. So they uphold anything that's peer to peer, they want there to be central institutions that provides the foothold, the handhold for you know their control games. So, a system that comes along, it's peer to peer, and one to one and it doesn't have central institutions that can -- they can hijack is quite a threat to the oligarchy but I think it's the way to save the republic.
What we have is a massively underfunded fractional reserve banking system with no reserve requirements. When you're talking about the capital market. So, for example, U.S. treasury instruments are rehypothecated an average of two to three times. What that means is for every three to four people out there who think they own a U.S. Treasury bond, every three to four of them, there is actually one bond out there. It's huge game of musical chairs. It should scary you if you're full of one K, if your pension whatever, you know, you think you're investing in U.S. treasury instruments and that's your future. Just understand that that thing you think you own three other people think they own the same thing. And maybe it will work out for you. Works out for most people most of the time but under financial stress when and when the Ponzi scheme emerges oh, it's not going to work out for some people.
In 2002, overstock went public and when you are a public company C.E.O. you tend to be out there in the mix with regulators, bankers, prime pokers, hedge funds. It became quite clear to meet quickly after we went public, how corrupt the system is as it exists. How much criminality was going on. I was asked to take part of that, I knew because people explained to me and people asked me to take part. And so, I knew exactl -- so it's so strange to me, when I came out and started talking publicly about the criminality. In '04 people you know the press would run photos of me with photoshop UFO's coming out of my head. This guy saying what the SCC is in bed with Wall Street, what is he talking about, this is some weird conspiracy theory. To say that the SCC isn't protecting us that is actually you know a towel boy for Wall Street that's crazy talk. Well these guys are lucky they are lapdogs. They're lapdogs and they were looking for jobs. So, to me the two most important institutions in the society are how you create human capital and how you marry human capital with financial capital. Well, how you create human capital that's education how you marred to financial capital is Wall Street. So, the two things that we have to fix in order to save the nation to me or the education system and Wall Street and the way to fix Wall Street you drag it behind the bar and you kill it with an axe. You create an alternative that doesn't have any of these flaws that have emerged overtime in Wall Street.
We're building the platform that will let companies issue a crypto equity. Then we're going to be the first company to issue to crypto equity. In fact, we're going to the regulators and applying for permission to issue the crypto equity. And they're going to say well how you're going to handle this? How you're going to handle that? So, we have to build a platform. So this first time is going to be designed almost in conjunction with the regulators. We're going to be dealing with them, we've got this big law firm on our side who would be doing the work, and we'll be working out how we can issue a coin that is the equivalent of one common share or stock. But once we do that we will have built the platform that we can then open up to other companies. I issue in the blockchain that the possibility of manipulation becomes minimized both because of the transparency and also because the current stock market really is a huge game of fractional reserve banking without a reserve requirement. And nobody watching this video has any actual property rights stock. You think you do, you think you've got that hundred shares of IBM that you bought that show up in your ETrade account. You think you now understand that they're not physical but you assume that you know electronically that there that you have some property right in them. You do not. You have a daisy chain of contractual rights against somebody else who actually owns that property.
This basically is dragnet whole system behind the bar and killing with an axe. And creating an alternative, an alternative parallel universe where everything is true. You really will have your property rights, you really trading will be peer to peer. It's not immobilized in some central institution, that's owned by the guys who benefitted from there being slab in the system. It's a terrible set of institutional design, principles and bind in on our current system. And I think that cryptosystem -- people going in 10 years wonder how did we ever think it was okay to operate that way.
I been skydiving a lot the last few weeks, did forty-three jumps in the last three weeks and on one jump, around jump thirty, I had -- my parachute graze somebody else's as I was landing and I took quite -- quite a spell. In fact, it seemed, I thought it is, had healed up pretty well but it's going to (inaudible 00:07:21) me in something terrible today. And how often you get to tell people, well I had a skydiving injury. Last several of the year I broke my wrist when I slip bowling and I had to tell people well, I -- how are you, you know, I wish I had some sexy story well I slip bowling. So now that I have a skydiving injury I think I get to say that.
Follow us on Twitter to be the first to know about new videos on TheProtocol.TV