Overstock's Bitcoin transactions top $1M

Roughly two months after the company became one of the first major online retailers to accept Bitcoin (BITCN), Overstock's (OSTK +7.8%) transaction volume has topped $1M.  "We did not expect to hit this milestone so quickly," says CEO Patrick Byrne.

Byrne has suggested his support for Bitcoin is fueled by both ideological and business motivations. "[Bitcoin] helps us fight the machine," he told Wired.

Bitcoin transactions still amount to a small percentage of Overstock's total sales: The company's Q1 revenue consensus is at $344.9M.

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Comments (10)
  • A-rod
    , contributor
    Comments (8) | Send Message
    This is good news, sure.
    Mt Gox and its bad management are gone, thats good news (unless you had wallets with them)
    All of this is confirms the evolution of Bitcoin is real, out with the old in with the new, let the debate continue, while I sit back and collect 500%+ daily dividends on Bitcoin holdings. See ya in 10 years
    4 Mar 2014, 04:21 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (36431) | Send Message
    It's weird to accept bitcoin right now when it's known that around 7% of the existing coins have been stolen.
    4 Mar 2014, 04:31 PM Reply Like
  • ThetaDecay
    , contributor
    Comments (103) | Send Message
    Individual coins are unidentifiable, so companies have no fear that investigators will come knocking.
    4 Mar 2014, 05:55 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (36431) | Send Message
    Still, it would seem that the likelihood of accepting stolen money is unacceptably high.
    4 Mar 2014, 05:59 PM Reply Like
  • ThetaDecay
    , contributor
    Comments (103) | Send Message
    Oh, I completely agree.


    But the same could be said of the US dollar, or any currency that's been in circulation. Some of that money, at some point in time, was procured by someone through illegal means. Not quite the same thing, but studies estimate that anywhere from 80%-94% of all U.S. paper currency has trace elements of cocaine.


    Refusing to accept Bitcoin will not help the victims recover their funds. In fact, doing so would only serve to hurt the 93% of people who have invested in Bitcoin through legitimate means. I guess misery loves company, but that doesn't really seem like a desirable outcome. At least that's how I feel.
    4 Mar 2014, 06:23 PM Reply Like
  • Jason Hamlin
    , contributor
    Comments (249) | Send Message
    I agree with ThetaDecay. You are much more likely to be transacting in stolen money using U.S. dollars than Bitcoin. The fiat notes were counterfit to begin with.
    4 Mar 2014, 07:37 PM Reply Like
  • MarketLost
    , contributor
    Comments (2912) | Send Message
    <<The fiat notes were counterfit to begin with.>>
    So the gold bugs are now backing something even less tangible than the USD?
    4 Mar 2014, 10:07 PM Reply Like
  • studybreak-investor
    , contributor
    Comments (5) | Send Message
    This should be good news for TUNCD Bitcoin Shop.
    4 Mar 2014, 08:30 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1865) | Send Message
    Are they really accepting bitcoin or just have a facility to exchange bitcoin for USD ?
    I seriously doubt they are holding bitcoins for more than microsecond.
    5 Mar 2014, 01:11 AM Reply Like
  • MattZN2
    , contributor
    Comments (1334) | Send Message
    Pretty impressive actually, the transaction fee is indeed sub-1%. I don't own any bitcoin (and don't intend to), but I got onto overstock and went through all but the last steps of a purchase and the BTC it asked for was only slightly above coinbase's buy price for BTC. Now, of course, the BTC spread on the exchanges is all over the map so all the risk is on the consumer.


    Overstock of course is not actually doing a bitcoin transaction. Overstock's merchandise is quoted in dollars and Coinbase is converting the BTC to dollars and giving overstock the dollars. So overstock has no risk and the BTC amount being charged changes according to the realtime conversion (I think you probably have a small window in which to complete the purchase in BTC before you have to retry with an updated value).


    It looks to me like coinbase has a reasonable service here that it can sell to merchants. If Overstock is paying 2% in overhead for a credit card transaction and coinbase is only charging ~1%, then overstock gains an extra 1% in profit doing a bitcoin transaction rather than a credit card transaction. It's unclear whether this will actually support bitcoin as a currency since goods aren't being priced in bitcoin, but it will support volume on the coinbase exchange and probably reduce the nominal spread (at least on that particular exchange).


    The 1% savings is a legitimate business reason for overstock to accept bitcoin (though probably far less of a savings than bitcoin true believers thought it would be, and doesn't address the volatility risk to the consumer holding the bitcoin). Essentially, this new mechanism has transfered much of the overhead and risk to the consumer using the bitcoin and away from the business.


    It won't last, but it would be cool if it put pressure on the CC companies and banks to reduce the merchant fees (which is a function of the business, not a function of the currency).


    5 Mar 2014, 01:45 AM Reply Like
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