Overstock CEO: Modern Financial System is a Ponzi Scheme, Collapse Will Bring Global Crypto Adoption

Patrick Byrne, the CEO of Overstock, stated in a recent interview that the entire modern financial system is a “big Keynesian magic money tree ponzi scheme”.

The statements were made during an interview with crypto YouTuber Naomi Brockwell on Monday, October 7.

The CEO of the tech-driven online retailer, which was one of the first major retailers to accept bitcoin, also believes that the modern financial system will eventually collapse, ushering in the global adoption of cryptocurrencies:

“People turn to it where they collapse, like Venezuela or Cyprus or Syria, something like that. When people start getting into it is when their own financial systems collapse.”

When asked about the role of governments in regulating cryptocurrencies, Patrick admitted being a national security libertarian. He believes that know-your-customer (KYC) and anti-money laundering (AML) requirements are important tools to keep criminal activity from thriving on the crypto sphere:

“I guess I must confess, as revolutionary as I am – I’m what you could call a national security libertarian. So I worry about threats to our country. And that means that KYC and AML are not just things to be scoffed at.“

Patrick believes that it is possible to take blockchain to the point where it becomes completely anonymous. On the one hand he loves the idea of becoming truly free and anonymous, but on the other he acknowledges that there will be some bad actors that will take advantage of the situation to hurt others.

Patrick is of the opinion that there is a right balance between freedom and security but “the more the world gets digitized, the more there will be government surveillance.” He trusts that distributed ledger technology can remake society and hopes that authoritarian states are unable to exert control and own the technology. Specifically referring to China, he also expressed his concerns on the country’s plans to rank all its citizens based on a "social score" by 2020.

Patrick thinks that social barriers and stigma and the idea that Bitcoin is mainly used for illegal drug trades and money laundering, are what’s holding back crypto adoption. When asked if Bitcoin will become a worldwide currency or if it will always have specific use cases he replied:

“Now, whether Bitcoin is the one, whether Bitcoin has solved its speed problems or it’s another cryptocurrency, only time will tell.”

‘Securitization, Tokenization and Fractionalization of Real Estate,’ Explained by Carmen Benitez

Carmen Benitez, the Chief Executive Officer at Fetch Blockchain Ltd., a London-based firm that “specializes in blockchain technologies for land registries, government and property stakeholders,” has argued that the nascent “crypto economy [represents] the new era for financial markets.”

Benitez, who’s also the President and Managing Director at Fetch Plus, Inc., a global tech publishing company, told CryptoGlobe that cryptocurrencies are an evolving asset class that are transforming the “disparate and opaque” nature of certain traditional financial markets. She added that this is what makes it “interesting and exciting” to use “blockchain applications.”

According to Benitez’s assessment: 

The growth of emerging technologies that the financial and real estate sector have experienced in the last few years is staggering.

Addressing “Opacity And Lack Of Functionality” Of Traditional Titles

She also noted: “Our company, Fetch Blockchain Ltd, has built a blockchain and AI driven real estate technology called Sesamee. [We believe] it is a groundbreaking technology. We took the position two years ago through a strategic collaboration with Countrywide, the UK’s largest estate agency, to address the real estate life cycle from the actual asset, which in the case of real estate is the title.”

Benitez further mentioned that:

Our thesis was simple - we would take existing archaic title management systems and inject a blockchain solution that cleans, digitizes, and provides a reliable foundation for property players. This foundation allows them to interact and complete transactions into titles free of errors. This way we [address] the opacity and lack of functionality of a title, which has been causing significant havoc on the liquidity of real estate.

She explained: “In the UK, Her Majesty Land Registry (HMLR) manages eighty miles of shelf space worth of titles. And while asset title management systems are being digitized, most unfortunately lack the reliable means to perform real estate functions to address the issues that plague the real estate process. In essence, they are simply digitized shelved titles.”

Real Estate, A $250 Trillion Market Offering Only 2.5% Liquidity

Benitez continued: “Just think about it, real estate is the world's largest asset class, [as it is] worth more than $250 trillion. However, currently it offers very low levels of liquidity, around 2.5%. But the good news is that our solution fixes the lack of functionality of title management systems, and enables the entire real estate life cycle to become liquid. By creating a foundation for securitization, tokenization and fractionalization of real estate, Sesamee will inject significant liquidity in the largest asset class in the world.”

Going on to share her past professional experience, and how that’s helped in her current role, Benitez remarked:

I spent nearly twenty years designing several real estate technology platforms. In 2008, I was named Marketer of the Year by the largest homebuilder association in the US. I secured $50 billion worth of real estate assets as customers of the marketing platform that I designed [conducted various transactions.]  I was also named Woman Entrepreneur of the Year in 2014, and served on multiple advisory boards across the US, UK and Singapore.

She added: “I spoke in depth at some of the most respected global organizations, like the United Nations and the OECD, on data standards, regulation and emerging technologies. This experience allowed me to realize that the largest asset class in the world [must be managed properly]... It cannot exist on a faulty, error prone, fragile foundation. The perfect marriage of real estate and technology in my background and past experience led me to realize what technology tools can do to transform real estate as an asset class.”

Benitez further noted: “Can you imagine easily purchasing real estate from anywhere in the world? Instead of the current cumbersome and inefficient system governed by paper titles, conveyancers, and archaic management systems, Sesamee [aims to] create a world where real estate is more accessible to the consumers and businesses alike.”

Real Estate Sector About To “Explode With Opportunity”

Commenting on the current crypto regulatory landscape, Benitez mentioned that:

Now is the time to start watching the real estate sector as it is about to explode with opportunity. There is a great deal of activity to get regulation right in economies that are advancing every day through emerging technologies.

Benitez further explained: “Smart contracts enable blockchains to meet the stringent legal requirements of regulatory bodies. Real estate markets need security, transparency, reliability and clear ownership. Credit ledgers find this more difficult than a digital ledger designed from its inception to be immutable and transparent. As diverse as the global real estate market is, smart contracts can provide flexible solutions. We feel it’s the right time to introduce the Sesamee solution as many governments are looking to digitize their property and land databases.”

Elaborating on how the underdeveloped nations might incorporate the latest technology to enhance the growth of their real estate sector, Benitez stated: “They are introducing regulations supporting the mandate. In less developed markets, governments are seeking to leapfrog legacy systems and provide surety of title to reduce fraud, tax leakage and critically attract foreign direct investment (FDI).”

Benitez also revealed that: “Major organizations and regulatory bodies are moving quickly and with a sense of being flexible for innovation, which I find refreshing and exciting. As an example, I am participating in the Royal Institution of Chartered Surveyors Leaders Forum on Data Standards and Blockchain Regulation. RICS is a professional society that promotes the highest international standards in the valuation, management and development of land real estate construction and infrastructure. The Leaders Forum will provide RICS’ with insight and intelligence on blockchain to help shape its overall standards strategy encompassing data, technical and ethical market issues. These standards will have a lasting impact on the entire global real estate industry, enabling new players like exchanges to join.”

She went on to mention: “I was also invited to become the Chair Woman of the Blockchain Land Registration and Title Management committee by the All Party Parliamentary Group in the UK. This influential position gives me the opportunity to work with the members of parliament in the UK to make sure the regulatory side accommodates the innovation coming from the industry.”

Blockchain Tech Brings “Modernization” To Global Economic System

Explaining what she believes might be the potential impact of blockchain technology and crypto in the next 10 years, Benitez told CryptoGlobe:

Blockchain brings modernization to a global economic system that was passed over by digital innovation. Initially, the internet developed around information exchange. Digital transactions are only now finding security through blockchain technology.

She added:

Blockchain technology has proven itself effective as more than just a digital financial ledger. It is being used by established corporations for dynamic data manipulation. Blockchain has always touted its value for data security. These two applications make them particularly useful in managing real estate assets. Real estate markets are governed by what some see as excessive regulation. From intermediaries to legal constraints to multiple jurisdictions, real estate transactions are among the longest and most difficult to complete with tremendous churn.

Benitez continued: “As an example, in the UK it takes on average four months to complete a real estate transaction with 37% of the agreed deals falling apart. Once Sesamee introduces its digitized perfected title as the foundation for real estate transactions, real estate will be treated like securities that will in turn inject liquidity into the financial markets. This new security class will become a major player on Wall Street, with direct transactable titles and enhanced products like CDOs benefiting.”

In response to a question about the potential long-term impact of Machine Learning (ML), Artificial Intelligence (AI), and Big Data on crypto, Benitez said: “We can already see that the impact is likely to be massive. With our Sesamee technology, the entire real estate industry [may potentially] get direct insights and can communicate with individual to large data sets instantly. It will perform actions it couldn’t in existing real estate processes.”

According to Benitez:

AI is enabling functionality of datasets that’s managed within reliable foundations built on blockchains. The greatest impact of this functionality will be felt in the creation of new revenue streams from insights. Data will be aggregated in ways that were not possible or timely enough previously.

When asked whether the traditional fiat-based financial system will exist side-by-side with crypto, or if cryptocurrencies might replace fiat money, Benitez predicted: “There will always be a place for traditional systems as some regions are slow and / or loathe the change. But the reality of opaque asset classes like real estate becoming liquid and exchangeable through tokenization, securitization and fractionalization is not science fiction. It will exist in both crypto and fiat-based financial systems.”

Responding to a question about whether the future job market will be affected with the introduction of distributed ledger technology (DLT) and cryptographic assets, Benitez said: 

To a degree. In the long term term, Blockchain, DLT and cryptographic assets will replace the need for certain functions performed by intermediaries in many situations. But what will happen in the near and mid-term is that the intermediary won’t vanish. Instead, you’ll see they’ve gained substantial efficiencies in their functionality.

She further noted: “Similarly, cryptographic assets will require substantially less management than the current assets. However, emerging technologies like blockchain, crypto assets is [essentially] a modernization program, and we will not see full job market changes happen in the near or midterm horizon.”