Bitcoin has been around for more than a decade, yet the question still persists: “What’s the purpose of cryptocurrency?” Even though people have bought and sold billions of dollars of the stuff, it has yet to find a role in everyday life.
Now, this search for the cryptocurrency world’s “killer app”—the equivalent of a transformative application like Gmail or Uber—may be over. According to Patrick Byrne, the CEO of Overstock and a longtime booster of digital money, the breakthrough is coming in the form of security tokens.
These are units of cryptocurrency that are tied to some real world asset such as real estate, precious metal or fiat currency. Byrne, who was speaking at Coins2Day’s Brainstorm Finance event on Thursday in Montauk, N.Y., hinted that he would soon be making a major announcement related to security tokens but couldn’t immediately provide details due to regulatory reasons.
If Overstock, which was among the first major retailers to let customers pay in Bitcoin, does announce a security token offering, it wouldn’t be the first company to try this. In late 2018, a company called Harbor designed tokens representing stakes in a student residence, while a luxury hotel in Colorado has attempted to do the same.
The Harbor project, however, abruptly fell through this spring amid a dispute with a mortgage lender, and it’s unclear if any similar real estate deals are in the works. Despite such setbacks, the promise of security tokens received a boost this week from the announcement of Facebook’s Project Libra, which will see a consortium backing the project issue such tokens to accredited investors.
All of this comes as the vast majority of activity surrounding cryptocurrency remains highly speculative. According to Alesia Haas, the CFO of Coinbase, over 95% of people buying crypto are doing so purely for speculative reasons.
She also spoke, however, of a major change that’s been underway in the last 18 months. Haas said “the utility phase has taken off during this time,” and that there is a new push to make digital tokens—including security tokens—part of traditional financial operations and other aspects of day-to-day commerce.
For many ordinary consumers, though, the arrival of crypto’s “killer app” may feel as far away as ever.
More must-read stories from Coins2Day Brainstorm Finance:
—Brainstorm Finance 2019: Watch the livestream of the inaugural conference
—Andreessen Horowitz: How Facebook’s Libra cryptocurrency will be governed
—Welcome to the next generation of corporate phishing scams
—Western Union and Zelle dish on the competition and talk mobile payments
—Millennials are not basement-dwelling potheads, says Wealthfront CEO
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