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"People often say that" blockchain will change the world with dot-dot-dot. "Now everyone needs to understand what is" point-to-point-point "and build it."
This is how Jonathan Johnson, president of Doctors Ventures of Overstock.com, describes the objectives of the venture-blockchain fund focused for 2019. He told CoinDesk that, for the 19 companies in the Medici portfolio, the focus of next year " it should change compared to new ideas to run on those ideas. "
Since 2014, Overstock has invested $ 175 million in the medical portfolio companies, a list that includes the token trading security platform tZERO, the enterprise technology provider Symbiont, the Voatz voting app, the start of loans Ripio, the Factom data management platform and others.
Although it started out as an investment arm, Medici could soon become the core business of the publicly traded company, as founder Patrick Byrne is trying to sell the flagship online sales site by February. If everything goes according to plan, the sale would leave the company with "Medici, it's a legacy and a lot of money", according to Johnson.
But while he said that the management team views blockchain as a long-term investment, he aims to see some preliminary results soon.
"We want our portfolio companies to focus on having their products in production," Johnson said, explaining:
"When you have a product, start opening the creative juices, [people start] asking "how can we use it" and change the discussion. When it comes primarily to technology, people want to talk about the Merkle tree, mining, nonces … All that talk becomes confusing and in progress ".
Steven Hopkins, chief operating officer of Medici, agrees that the delivery of a product moves the narrative.
"We need to do more than simply explain what blockchain applications they can be," he said in an interview. "We need to show people how unbelievable the blockchain is by throwing blockchain products in. When people can use a product, they're halfway through the learning curve of what is blockchain, and now they really care how it works."
As an example, Johnson added: "I do not know if my mother-in-law cares if a voting app uses blockchain and said," Wait a second, is it a safe way for me to vote? And I do not have to wait in line at a middle school for three hours and wait two weeks before I know who my deputy is? & # 39; "
Get back early
In fact, that example is more than theoretical – Johnson has mentioned Voatz as one of the first successes in the Medicean portfolio.
The blockchain-based voting app has been piloted this year in two West Virginia counties during the primaries in May, when only 13 people voted. Then, during the November midterms, it was launched for 24 out of 55 counties. According to official state data, 144 voters in 30 countries have used the app to vote. The pilot was open to the Western Virginians living abroad, a group that includes members of the army who serve in foreign countries.
It is worth noting that Voatz has been widely criticized this summer, with journalists and computer security analysts interrogative the quality of the solution, its security and the idea that the app in its current state is a blockchain-based system.
Apart from these criticisms, Medici considers the first promising results.
"Voatz's debut in West Virginia went very well," Johnson said. "It was really limited, and I think that the way Voatz and the state imposed it on the primaries, and then during the general election, was wise." I looked at some letters sent to Voatz by the military who said things like: "At I was pleased to vote for you ".
At present, people have to rely on quite a few links in the chain to make sure their vote has been cast, Johnson continued. Although those who perform the voting process are reliable and highly reliable, he said, the blockchain offers unprecedented opportunities to an elector: access the system after the fact and check whether their vote was actually counted.
This approach can radically improve confidence throughout the election, according to Johnson, so that people can "trust the system and not worry about Russian hackers".
After foreign voters, the next wave of testing for Voatz should include disabled voters, so the vote for absent, Johnson believes – and therefore anyone should have an option to vote via the app, if desired.
Play the long game
Despite Medici's resistance on the Overstock bottom line – the unit lost $ 39 million in the first nine months of the year, contributing to a total net loss for the company of $ 170 million – Johnson he said the plan to sell the retail business and focus on blockchain is supported by patient investors who believe in Byrne's vision.
"Our shareholders are interested in the blockchain business, and when you look at our last earnings call, it was slide 23 when we started talking about our retail business," Johnson said. "The Overstock team makes decisions based on what's best for the long-term value for the company, not what's best for Q4, Q1 or any other quarter we're reporting."
Another priority next year for Medici will be the launch of tZERO, the regulated exchange of security tokens that Byrne has long publicized as a solution to the inefficiencies of Wall Street and the lack of transparency.
Technically, the exchange remained open for two years, only the trading tokens representing Overstock's preferred stock. However, the business was light, with only 10 exchanges between mid-December 2016 and March 2018, according to a public deposit.
The exchange will be up and running seriously in January, according to Johnson, and its first additional asset will be the tZERO stock tokens that the platform sold to over 1,000 accredited investors in August, raising $ 134 million.
While the uncertain and still developing regulatory regimes continue to be a significant obstacle to the effective dissemination of technology, the startups supported by the Medici see direct work with governments as a fundamental step to address it.
This is what the start-ups supported by the Doctors are doing outside the United States, such as the launch of a Barbados-based Bitt, which speaks to the central banks of the region on the issuance of digital currencies of the central bank (CBDC) or Governance of the Earth Doctors working with the government of Zambia on a digital land registry.
All of this helps "move from a too regulated world to, perhaps, a clearly regulated world, then to a less regulated world and a decentralized world," says Johnson.
Noting that the US government is "the largest intermediary" in the country at this time, the leadership of the Physicians believes that the regulatory environment can be changed step by step.
"If you look at travel agencies and the internet – we did not get rid of them overnight, we simply proved that they are less and less useful for us," Johnson said, adding:
"So we take incremental measures in this way, we see the least necessary intermediaries, we see regulation maybe not necessary, and we get to a point where everyone can agree with it."
Jonathan Johnson (on the right) and the image of Steven Hopkins through the CoinDesk archive
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