Banking Blog

Finance Blogs » Banking » Overstock.com begins taking Bitcoin

Overstock.com begins taking Bitcoin

By Allison Ross · Bankrate.com
Friday, January 10, 2014
Posted: 5 pm ET

Shoppers at Overstock.com will now see a new payment option when they go to check out.
banking-blog-bitcoin-overstock-button

That's right: beginning Thursday, Overstock began accepting Bitcoin as a form of payment, becoming one major online retailer to take the plunge.

So far, the company has had about 800 orders from Bitcoin users, worth about $120,000, said Patrick Byrne, Overstock.com chairman and chief executive.

Byrne said the average order so far has been about $150, much of it for jewelry and furniture. He said one of the first orders was actually for a $2,700, 13-piece patio set.

Will others follow?

Byrne said he read the large orders as Bitcoin users were "trying to tell me thanks." He said that, by being a major retailer accepting bitcoins, others will be forced to follow.

"I'll be shocked if you don't see Amazon and eBay and Wal-Mart and Target accepting the coin, too," he said in an interview with Bankrate.

Overstock had announced several weeks ago that it intended to begin accepting Bitcoin, but had originally put a timeline of about six months to start.

But Byrne said the response to the news of his announcement was "so amazing. ... It made me realize there are a lot more people who want to see this happen than I had been imagining."

Byrne said Overstock.com worked with several companies but ultimately chose Coinbase, a startup payment service for cryptocurrencies, because Coinbase offered to bring people to Overstock to help speed the process.

That six-month timeline quickly shrunk to a month, Byrne said. Then, on New Year's Day, the timeline was squeezed again, down to 10 days.

For now, people buying stuff on Overstock.com using bitcoins must be aware that returns and refunds are eligible only for in-store credit, except for canceled or unfulfilled orders. And bitcoins can only be used for orders shipped to the U.S.

Limited government

Overstock's move to begin accepting the cryptocurrency as a form of payment was not only a business move but a political statement, Byrne said.

"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," Byrne said in a press release.

To be clear, Overstock is not actually dealing in Bitcoin. Coinbase converts consumers' bitcoins into dollars and transfers the dollars to Overstock.

Byrne said that decision was made to hedge some of Overstock's risk. Indeed, Bitcoin's value continues to fluctuate, so a bitcoin worth $900 could quickly drop to $750, for instance.

But Byrne, who doesn't own any bitcoins himself, also said he could see a time where Overstock deals directly in Bitcoin.

A small but growing number of businesses are allowing consumers to use Bitcoin to pay for things, although Overstock is one of the largest retailers to come on board.

"People in the Bitcoin community, they understand the revolutionary nature of our action," Byrne said.

What do you think? Will and should other retailers also start accepting Bitcoin?

Follow me on twitter: @allisonsross.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
1 Comment
Add a comment

(Comments may take 5-10 minutes to appear)