To raise funds to develop that exchange, the online retail giant is launching an initial coin offering (ICO) for T0.com (tZero), the company's blockchain-focused subsidiary and trading platform that supports equity tokens.

Byrne announced details of the ICO at Money20/20 in Las Vegas on October 24, 2017.

The ICO will take place from November 15–December 31 and will include the sale of 50 million tZero security tokens. Tokens will be sold in a type of presale known as a SAFT (simple agreement for future token), which limits participation to accredited investors.

tZero will incorporate profit sharing features of a security as well as utility features of an app token. For instance, token holders will be able to use the tokens to pay for exchange fees. They will also receive a percentage of tZero's profits, distributed quarterly and paid into their tZero digital wallets.

Speaking to Bitcoin Magazine, Byrne said proceeds from the ICO will go to further developing an ecosystem around tZero.

He did not reveal how much Overstock hoped to raise or whether the sale would be capped or uncapped, but he said additional details would be made available around November 8.

Forward Thinking

Byrne has been thinking about a blockchain-based equity exchange for trading blockchain shares for some time now.

Right now, most tokens are utility tokens that play some role in the distributed app they were designed to work with. Equity tokens, on the other hand, are regulated by the U.S. Security and Exchange Commission (SEC) and represent an actual share in a company.

Byrne thinks that, eventually, most of the tokens in blockchains today will convert to equity tokens. Taking that concept a step further, he believes all company traded stocks will ultimately be issued as blockchain share certificates.

Right now, however, no SEC approved exchange exists that can handle equity tokens, so Overstock is creating one.