In a move which is sure to cause a stir amongst online retailers, Overstock.com has become the first major retailer to accept Bitcoins as payment.
With the value of Bitcoin fluctuating rapidly and having an air of unpredictability, it is no surprise that companies have been reluctant to take the online currency on board just yet. However, one of the largest online retailers in the US, Overstock.com, has broken the mould as enthusiastic CEO, Patrick Byrne, is a big fan of the currency.
Announcing in December that the company would be looking to adopt the currency as a payment method within six months, only one month into their plans the retailer has announced it would now be accepting the currency, with management from one of the biggest online Bitcoin banks, Coinbase.
The biggest worry for retailers taking on the online currency is the volatility of the market, as they fear that if they accept Bitcoins at a rate of say, €500 to a Bitcoin, within a day or two this could drop to €20 and all that initial value would be lost.
However, with Overstock.com’s agreement with Coinbase, once a payment is being processed, Coinbase will set the exchange rate at the value from the moment the order is placed and will instantly transfer all funds in traditional currency from the buyer to the seller. This means that in effect, companies like Overstock.com will never possess any Bitcoins themselves.
An online economy
Founded in 2012 by Brian Armstrong and Fred Eshram, Coinbase deals with another 19,000 much smaller online retailers, as well as processing the transactions of more than 770,000 individual Bitcoin wallets.
Speaking to Wired, Byrne believes this move wasn’t simply about experimentation or publicity, but rather to be, what he perceives, as ahead of the curve: “I felt I had tipped my hand. I didn’t want someone else to beat us.”
He later went on to explain in the interview that he actually sees the currency as being much more stable and less corruptible from what he sees as meddling from influential governments and banks: “We want a money that some government mandarin can’t just whisk into existence with a pen stroke. Bitcoin is that.
“What’s more, it lets you store your money in a place that’s outside the control of big banks. It just makes the world a better place. It lets you get out of that world where you have to store your money with institutions you don’t trust.”
Take up is expected to be slow at first, but the number of Bitcoin users is expected to rise once a level of stability has been reached.
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