Bitcoinist caught up with Chris Horlacher, CEO of Equibit, a decentralized, peer-to-peer securities platform. It integrates multiple blockchains into a single application allowing issuers and investors to manage every aspect of their relationship in a decentralized, secure manner.
Interview with Equitbit CEO, Chris Horlacher
Bitcoinist: What’s the major problem with OTC markets, depositories and transfer agents that you’re trying to solve with blockchain technology?
Chris Horlacher (CH): The entire securities industry is built on top of a foundation of central securities depositories and transfer agents. Stock brokers, exchanges, investors, issuers, etc. are all beholden to these companies. It’s rumored that one transfer agent in the USA has title ownership to over 90% of all the issued stock in the country! The counterparty risks are immense and for the most part, unknown to investors. There’s tremendous centralization, creating security risks. Oh and fees, billions of dollars of annual fees that all get passed on to investors in the form of trade commissions and other account charges.
Bitcoinist: Why should these investors use blockchain? Why not simply an encrypted database instead?
CH: Encrypted databases are what’s being used right now. So it suffers from centralization and counterparty problems and is a relatively high-cost solution to the problem of executing and settling trades.
It’s a completely open blockchain and anyone will be able to mine it.
Bitcoinist: With regards to Equibit transaction speeds – how much faster are we talking compared to conventional OTC markets, depositories and transfer agents?
CH: Right now the industry is operating on T+3 settlements, meaning trades are settled 3 business days after the order is executed. In the private markets, this actually can take quite a bit longer. Certain transfer agents will be moving to T+2 settlements but even that can’t compete with Equibits’ real-time settlements.
Bitcoinist: Bitcoin uses Proof-of-Work mining. How is the Equibit blockchain secured? Is it a permissioned or permissionless network?
CH: Equibit will be secured with a Proof-of-Work system, just like Bitcoin, although it doesn’t use the same hashing function. It’s a completely open blockchain and anyone will be able to mine it.
Bitcoinist: How is Equibit’s platform trustless? Is it immutable and how, and by whom, is the network protocol managed and updated, if needed?
CH: Equibit is built on the same code as Bitcoin. Bitcoin has had its trial by fire and shown its resilience for 7 years straight. Equibit enjoys all of the same features as Bitcoin and has a lot more making it the ideal equity platform.
Our view of this technology is that there will ultimately be many different blockchains, each specialized for different asset classes.
Bitcoinist: Why did you opt for a proprietary Equibit blockchain instead of using Bitcoin, the most popular and most secure blockchain today?
CH: We did…