Overstock’s CEO, Patrick Byrne, is known for being vocal about short selling practices of stocks that could (and often do) result in the artificial inflation of stock inventories. But in Blockchain’s inherent distributed ledger functionality, Byrne sees a technology that closes that loophole. To prove his point, Overstock has launched an API
The API has a built-in auction system. When a fund sends the stock to the API, it auctions the stock by generating a digital locate receipt on the blockchain. This prevents overlocating from occurring because the blockchain has all the receipts of the sale and records the underlying stock. The auction occurs on the Overstock API, which is licensed to prime brokers.