Overstock starts accepting Bitcoin

In a move that's apparently motivated by a mixture of politics and business, Overstock (OSTK -1.6%) has become the first major online retailer to start accepting bitcoin (BITCN) for payment.

Chairman/CEO Patrick Byrne is a firm believer in the cryptocurrency's long-term potential to diminish the power of governments and major banks - "It helps us fight the machine" - but also insists Overstock's move will eventually benefit the company's bottom line. "Mighty oaks from tiny acorns are sprung, and all that."

Two challenges: 1) The total value of all bitcoins is still only around $11B. 2) The currency's immense volatility provides exchange rate risk. However, Overstock's bitcoin payment service provider (Coinbase) will hedge against, and be responsible for, the latter.

Meanwhile, Zynga might soon allow the use of virtual currency to buy virtual cows. The social game developer is testing the use of bitcoin with a handful of titles, including FarmVille 2 and CastleVille.

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