The Unicorn: tZERO

By Mike Rogers, CPA, Digital Asset Advisor

On January 3rd, 2009, Bitcoin’s genesis block was mined and the financial system was officially put on notice: traditional financial services infrastructure will one day be replaced by blockchain technology. Blockchain’s innovation allows unique and secure ownership of digital property, empowering users in new ways. Digital security exchanges, such as tZero, a subsidiary of Overstock.com, Inc., were founded to facilitate transactions and pioneer the future of financial services.

In 2014, Overstock.com made headlines when it became the first major retailer to accept Bitcoin as payment, under the leadership of Patrick M. Byrne, the Executive Chairman and Founder of Overstock and tZERO. As a long time digital asset proponent, Mr. Byrne believes blockchain will disrupt the global capital market hierarchy. Overstock has invested $175 million in tZERO and other blockchain startups through its wholly owned subsidiary Medici Ventures Inc.

tZERO strives to become the global leader in blockchain innovation for capital markets. According to their website, tZERO’s technology will “revolutionize the market and fix the inherent inefficiencies of Wall Street so that financial processes are less beholden to traditional, institutional market structures.” Transactions can be matched and settled instantly, replacing the antiquated T+2 settlement cycle with zero delay. tZERO’s lucrative potential has garnered the attention and capital of major investors.

In August, tZERO reached “unicorn” status with GSR Capital’s term sheet to invest up to $270 million at a valuation of $1.5 billion. The term “unicorn” was popularized by Aileen Lee in her 2012 TechCrunch article, “Welcome To The Unicorn Club: Learning from Billion-Dollar Startups,”. “Unicorns” are a rare breed — only .07% of all software companies achieve valuation of $1 billion or higher. Byrne championed the GSR investment by stating, “They are aligned with our vision for the future of capital markets built upon the speed, trust, and security of the blockchain. And most importantly, they think big, and want to help us scale this vision globally as quickly as possible.”

Patrick Byrne is recognized as a visionary corporate leader who foresaw e-commerce as the future of retail when he launched Overstock twenty years ago. After many profitable years, Overstock’s profits stagnated, and Byrne began to pivot as the market and new technologies changed the business landscape. Overstock now has plans to sell its retail business, which will allow the company to focus solely on blockchain technology.

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