Bitcoin wins the heart of libertarian CEO
Encouraged by positive Senate hearings in November and enthusiastic Bitcoin processors, online retailer Overstock.com has decided to take the plunge and accept the cryptocurrency. In the first 90 minutes of Bitcoin sales, the site received around 150 orders.
Overstock took the decision several months earlier than had been planned.
The libertarian chief executive of Overstock.com, Patrick Byrne, said in a press release:
This is historic. Digital currency will be an important part of the future and Overstock is excited to be the first major online shopping retailer to accept it.
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.
While the use of Bitcoin can lower Overstock's transaction costs, there is more than just business behind Byrne's decision to accept the digital currency. Speaking to Wired magazine he said "It helps us fight the machine.”
Overstock.com hired Bitcoin processing company Coinbase to handle the transition. On 1 January a 40 strong team was instructed to make the site capable of accepting the virtual currency.
Prior to a transaction taking place Coinbase will set the exchange rate, convert the customer's Bitcoin into dollars, and then transfer the dollars to Overstock, the company never holds any Bitcoin itself. So there is no exchange rate risk for either party.
Byrne believes that other online retailers will have to follow his company's lead.
Overstock joins over 19,000 businesses now serviced by Coinbase. With $1.3bn (£800m) in sales last year, Overstock is by far the largest retailer to accept Bitcoin as payment. “Generally speaking, Bitcoin merchants have fed the tech-early-adopter user base. But Overstock is not about that. This is about as mainstream as it gets," said Coinbase founder Fred Ehrsam.
The entrance of the virtual currency into the mainstream has been gathering pace in recent months. Now enthusiasts for the virtual currency can buy anything from cars to patio furniture.
In December an Orange County Lamborghini dealership sold a pre-owned Tesla Model S to a Floridian for 94 Bitcoins.