Chris Horlacher: Blockchain OTC Markets Could Bring Billions of Dollars to Investments
Equibit platform brings several apps that will provide some opportunities for investors as well as issuers and the first blockchain-based OTC market.
EDC ("Equibit Development Corporation") announced the update to their Equibit platform on December 3rd. They announced several apps that will provide some interesting opportunities for investors as well as issuers. Cointelegraph reached the CEO and Founder of Equibit Chris Horlacher to learn more about their new products and figure out what benefits they will bring to investors and issuers.
The Equibit platform was first announced in July. Chris Horlacher gathered a team to create the first blockchain-based OTC market. The platform will allow to trade securities without intermediaries. It will help save billions of dollars of fees to brokers and trading agents and bring the money to the development of businesses.
CT: Tell our readers about your new apps. How exactly will they work?
CH: Right now there's three apps planned for release:
CORE: It’s our open source miner, which will allow people to set up their own Equibit node and mine for Equibits. Miners are rewarded with new Equibits, as well as transaction fees that may contain actual company stocks as well. It would be an easy way for someone to passively build up a portfolio of investments. CORE will include a command line interface and API. We're aiming to produce a solid backend solution that can be integrated just about anywhere, including in to existing financial applications the industry is currently using.
INVESTOR: This will be a web-based wallet (we're calling them "portfolios") app that will allow users to transact in Bitcoins, Equibits, and Bitmessage. Investors have access to all the information on the network, making it incredibly easy to locate companies, buy and sell, all without the need for transfer agents or other OTC market information agencies. INVESTOR will have a research and analysis tool, similar to Yahoo or Google finance, where they can look up for companies and locate willing sellers. Buying/selling equibits is as easy as trading bitcoins, and the UI will be very similar to the trading screens you get through any online brokerage. Although we're adding the option for people to use a smart contract that ensures both participants get what they bargained for.
ISSUER: If a company wants to raise capital, this app will allow them to create equity units out of their Equibits, distribute notices and other messages to their shareholders, poll them, and easily distribute earnings via Bitcoin transfers. ISSUER will contain workflows for companies to create classes of equity, communicate with and poll the holders of their equity, and distribute bitcoins to them very easily.
INVESTOR & ISSUER are targeted towards the end user and will each have their own interface and workflows.
Overall, we're focused on making the user experience as familiar and simple as possible to current OTC market participants.
CT: Will your users be able to interact with traditional OTC markets?
CH: By integrating CORE into existing systems it would open up that possibility. However there are obvious incentives for current OTC issuers to convert over to Equibit so we see that as being the more likely course of action.
CT: What are the incentives exactly?
CH: Equibit makes the whole process of investor relations much quicker and cost-effective.
Creating a new issuance is far less expensive as issuers simply need to first obtain some Equibits.
Once created, these equity representations are unforgeable and this is currently quite a serious problem in the current OTC market.
Issuers never need to go through the process of splitting their shares, or issuing a share-based dividend to increase the liquidity of their stock.
The costs of distributing shareholder notices, MD&A's and other messages, conducting polls, and distributing dividends all drop to practically zero.
Willing sellers in the secondary market can make their shares 'discoverable' by other Equibit users, and buyers have access to all the trading history of a company thus making it unnecessary to pay for a service such as Pink Sheets (aka OTC Markets Group) for the latest trade information.
There's more, but these are really key value adds that our system brings to issuers.
CT: You’ve previously said in one of the interviews the opportunities will be available to North American angel investors. Are your products limited only to this geographical area? Can investors from other regions benefit from your new platform?
CH: The way we structured the offering has changed slightly since then and is now open to US, Canadian, and International investors. They can purchase preferred shares in EDC ("Equibit Development Corporation") that are redeemable for equibit units once the network goes up.
CT: Have you already managed to attract some well-known investors to your project?
CH: We've been approached by several Silicon Valley venture capitalists as well as asset managers at this point.
The launch of the platform is expected early next year.