Major US retailer starts accepting Bitcoin payments
Overstock.com has become the first major online retailer to accept Bitcoin as a form of payment on its shopping site.
Overstock, (which sells internationally under the name O.co), is a discount online shopping retailer based in Salt Lake City, Utah, that sells a broad range of products including furniture, rugs, bedding, electronics, clothing, jewellery and cars.
From today, Bitcoin will be offered as a payment choice along with Visa, MasterCard and PayPal. Overstock.com has partnered with Coinbase to process the payments and to handle the conversion of Bitcoin into US dollars.
"Bitcoin is well suited for online transactions. It has no transaction fees and works well for international customers," said Overstock.com Chairman and CEO Patrick Byrne. "Providing this convenience for the cult-following Bitcoin customer is the smart thing to do. Other online companies will have to follow suit soon."
Byrne explained to Wired magazine that, although it now offers Bitcoin as a payment option, Overstock will not hold any Bitcoin itself. Before each payment is made, Coinbase sets an exchange rate, immediately converts the buyer’s Bitcoin into dollars, and transfers the dollars to Overstock.
It has been suggested that this could ultimately undercut Coinbase, due to the rapidly fluctuating value of Bitcoin. However, Coinbase is confident it can minimise the risk by using software to carefully monitor price fluctuations and adjust its exchange rate accordingly.
"We believe that Bitcoin is nearing a tipping point for broad consumer adoption, and we couldn't be more thrilled to be working with the team at Overstock.com to help make that a reality,' said Fred Ehrsam, co-founder of Coinbase, in a statement.
Many people remain sceptical that Bitcoin can truly become a reliable currency. Despite being the world's most widely used cryptocurrency, it has developed a somewhat shady image due to its ties with illicit activity.
In 2013, for example, the FBI shut down the Silk Road – an underground online marketplace for drugs which was one of the most popular uses of the digital currency – and seized 144,000 Bitcoins, worth $28.5 million at the time.
However, Byrne sees Bitcoin as an important part of the future economy. The Bitcoin peer-to-peer network is made up of thousands of computers run by individuals around the world and does not answer to a central authority.
"As one who believes in limited government, this attracts me because it is a form of money that no government mandarin can will it into existence," he said.