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Overstock.com Plans To Accept Bitcoin

Posted by timothy on from the totally-a-flash-in-the-pan dept.

SonicSpike writes "Overstock plans to become the first big U.S. online retailer to accept Bitcoin, as Patrick Byrne, the company's libertarian chief executive, warms to the virtual currency as a refuge from government control. Mr Byrne told the Financial Times that Overstock planned to start accepting Bitcoin next year – possibly by the end of the second quarter – a decision that he said was driven mainly by his own political philosophy. 'I think a healthy monetary system at the end of the day isn't an upside down pyramid based on the whim of a government official, but is based on something that they can't control,' Mr Byrne said."

13 of 202 comments (clear)

  1. Overstock.com still exists? by Anonymous Coward · · Score: 3, Insightful

    Overstock.com still exists?..... Oooooh I see what they did there.

    This press release brought to you by O.co, just a few days before Christmas!

  2. Upside-down pyramids by NoNonAlphaCharsHere · · Score: 3, Insightful

    Yikes. What this guy knows about monetary policy and central banking is - staggering. While national backing-free fiat currency may not be the most desirable way to do things, multiple entities issuing highly volatile (think internet speeds) banknotes of dubious value (CPU cycles? really?) is an insane step in the wrong direction.

    1. Re:Upside-down pyramids by Anonymous Coward · · Score: 2, Insightful

      multiple entities issuing highly volatile (think internet speeds) banknotes of dubious value (CPU cycles? really?) is an insane step in the wrong direction

      I don't think you entirely understand bitcoin, or where the value of a currency comes from. First of all, there is only one issuer of bitcoin: the bitcoin network, acting in aggregate, according to a pre-agreed algorithm. Secondly, the value of almost any modern day currency is entirely a perceptual value caused by the notion that people will accept that currency at some approximately-known rate for payment for goods or services. The only reason bitcoin is highly volatile at the moment is that not many people are using it as a currency -- it is still far more popular as an investment vehicle than for its actual intended purpose. Only when more mainstream retailers start accepting it will we see its value reach long-term stability.

  3. Re:Guesses as to end effect? by rudy_wayne · · Score: 4, Insightful

    .

    I think a healthy monetary system . . . . is based on something that they can't control

    As fashionable as it is to be anti-government or anti-establishment, or Let's Stick It to "The Man", a monetary system not under government control is not the answer and Mr. Byrne is full of Libertarian bullshit. The recent article "Why I want Bitcoin to die in a fire" says it perfectly. Our current monetary system sucks, but replacing it with Bitcoin would be even worse.

    Yesterday I went to a store and bought some items. Today I went back to that store and everything was still the same price, and the dollars in my wallet were still worth exactly the same as they were yesterday, and the day before, and the week before and the month before. An unstable currency that changes value from one minute to the next is an unworkable mess.

  4. But how much will it cost? by Animats · · Score: 4, Insightful

    But will it be cheaper or more expensive than using a credit card?

    Accepting Bitcoins is surprisingly expensive. There's a volatility risk, and for a currency that can change by 10% in minutes, that's a real problem. Coinbase (which is a dealer, rather than an exchange) has a posted buying price, good for one minute, and some shopping cart systems use that. But that price is usually lower than the prices on the major exchanges; there's a conversion cost. So, as with retail money-changers, you pay a conversion fee. Also, like most money-changers, Coinbase will briefly stop buying during periods of high volatility or if they have trouble unloading their Bitcoins.

    Then, of course, there's prying the money out of the Bitcoin broker or exchange. Overstock is probably in a strong enough position to demand a daily sweep into a real bank account, with serious penalties for failure to deliver.

    If you look at the few Bitcoin-accepting businesses that sell real products with typical mail order retail markups, the Bitcoin price is usually significantly higher than the US$ price. Most of the stores that currently accept Bitcoin are selling T-shirts, posters, remaindered goods, and similar crap. Of course, that's what Overstock does, so it may be a good fit.

    1. Re:But how much will it cost? by rudy_wayne · · Score: 4, Insightful

      But will it be cheaper or more expensive than using a credit card?

      Accepting Bitcoins is surprisingly expensive. There's a volatility risk, and for a currency that can change by 10% in minutes, that's a real problem. Coinbase (which is a dealer, rather than an exchange) has a posted buying price, good for one minute, and some shopping cart systems use that. But that price is usually lower than the prices on the major exchanges; there's a conversion cost. So, as with retail money-changers, you pay a conversion fee. Also, like most money-changers, Coinbase will briefly stop buying during periods of high volatility or if they have trouble unloading their Bitcoins.

      And there's the problem. Bitcoins aren't real money. Before you can spend them you have to convert them into something (dollars, euros, whatever). Meanwhile, the paper in my wallet doesn't need any conversion.

  5. Re:Guesses as to end effect? by mishehu · · Score: 4, Insightful

    Why yes, that's an even better idea. Let's all have the gov't hoard all sorts of gold that could actually be used for something useful instead... You'd love for your graphics card to triple in price because now the gold for the contacts and other components is all scarce now, wouldn't you? A gold standard has a big downfall in common with BTC... it's naturally deflationary. A modest rate of inflation is not necessarily a bad thing, but having to go from paying 1/4 of your net income on your mortgage now to 1/2 of your net income in 15 years doesn't sound so hot either does it?

  6. Re:Guesses as to end effect? by Anonymous Coward · · Score: 2, Insightful

    you're a retard.
    the dollar is stable because it's backed by trillions in averaging commerce and billions in liquidity. huge fucking numbers.
    bitcoin appears unstable because it has not yet reached that scale.
    it has nothing to do with the base currency, be it bitcoin, dollars, or pigs.

  7. Re:Guesses as to end effect? by Anonymous Coward · · Score: 0, Insightful

    A gold standard can work better than the current fiat regime where nations are in over their heads in unpayable debt. In fact we should go to one just because it would force governments to curtail their reckless spending. The US has historically had a gold standard; Giulio M. Gallarotti wrote about the classical gold standard period (1870-1914) in The Anatomy of an International Monetary Regime:

    Among that group of nations that eventually gravitated to gold standards in the latter third of the 19th century (i.e., the gold club), abnormal capital movements (i.e., hot money flows) were uncommon, competitive manipulation of exchange rates was rare, international trade showed record growth rates, balance-of-payments problems were few, capital mobility was high (as was mobility of factors and people), few nations that ever adopted gold standards ever suspended convertibility (and of those that did, the most important returned), exchange rates stayed within their respective gold points (i.e., were extremely stable), there were few policy conflicts among nations, speculation was stabilizing (i.e., investment behavior tended to bring currencies back to equilibrium after being displaced), adjustment was quick, liquidity was abundant, public and private confidence in the international monetary system remained high, nations experienced long-term price stability (predictability) at low levels of inflation, long-term trends in industrial production and income growth were favorable and unemployment remained fairly low.

  8. Re:Guesses as to end effect? by xQx · · Score: 4, Insightful

    Parent should be modded up.

    Also, what is this "plans to accept" BS. There are heaps of online retailers who take bitcoin, and if they were serious they would have just used someone like coinjar.io to do the merchant service for them and convert it back to USD on the fly.

    Slashdot - stuff that matters.... It will be news when Overstock.com ACCEPT bitcoin, not when they do nothing more than release a press release that they PLAN TO ACCEPT bitcoin some day in the future.

    Thanks Slashdot for your thinly veiled Christmas advertising. Anyone wanna buy some Viagra?

  9. Re:Guesses as to end effect? by Patch86 · · Score: 3, Insightful

    Yeah, because the value of gold is totally stable:
    http://www.bullionvault.com/gold-price-chart.do

    There's a reason why every country in the world abandoned gold/silver/commodity linked currencies, and it wasn't because of a global conspiracy- it was because they were a disaster.

  10. Re:Guesses as to end effect? by Pentium100 · · Score: 2, Insightful

    A modest rate of inflation is not necessarily a bad thing, but having to go from paying 1/4 of your net income on your mortgage now to 1/2 of your net income in 15 years doesn't sound so hot either does it?

    You know what would be better? Being able to actually save money for years to buy something and no having the money lose value until I save enough of it.

  11. Re:The Slashdot of the past... by DogDude · · Score: 4, Insightful

    The Slashdot of 1997-2002 would have loved Bitcoin. The Slashdot of 2013 hates it for some reason. I wonder what changed?

    That's easy. Most of the Slashdot crowd has grown up.

    --
    I don't respond to AC's.