Overstock CEO Patrick Byrne recently said that the search for the “killer app” in cryptocurrency is over. He said that security tokens will be the next big breakthrough in the industry.
Making a case for security tokens
Bitcoin is the largest and oldest digital currency in the world, with millions of dollars’ worth of trading volume. However, Bitcoin isn’t accepted as a cryptocurrency in most countries, and it is difficult to find places to spend the currency. For a decade, the industry has been looking for a robust use case scenario where blockchain and cryptocurrency get widespread acceptance.
Patrick Byrne thinks that the industry’s next big thing will be security tokens. A longtime proponent of digital money, Byrne was speaking at Brainstorm Finance event by Fortune in Montauk on Thursday. He teased a big announcement related to security tokens but didn’t provide details about the project citing regulatory reasons.
He talked about security tokens just two days after social media giant Facebook announced it will be launching its own cryptocurrency Libra. It will be pegged against a basket of government-backed securities and help in launching the payments infrastructure of the company.
What could a security token offering mean for Overstock?
Overstock was one of the pioneers which allowed users to pay in Bitcoin. If it brings a security token offering to the market, it will be amongst the pioneers in this sector as well. Some other businesses have tried to offer security tokens in the past, but Overstock’s impact on the market is expected to be much bigger.
In 2018, a firm named Harbor created security tokens that represented a stake in a student residence. This project could not last for even a year, and a dispute with a mortgage lender added fuel to the fire. It is unclear if any such real estate deals are in progress which poses a question mark on the future of this offering. A Colorado-based luxury hotel has also tried to make a similar offering.
Even with such major projects, the cryptocurrency sector is still primarily speculative. Alesia Haas, Coinbase CFO said that more than 95% of people buying digital currencies are doing it only for speculative purposes. However, she noted that the industry is going through a shift, and things have changed in the past 18 months, and the utility phase has gained more prominence this time. She also indicated a push for digital tokens, including security token offerings.