Overstock plans to accept bitcoin payments in 2014

By George Chidi
Saturday, December 21, 2013 22:52 EDT
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Software engineer Mike Caldwell shows the front (R) and back, hologram side, (L) of a physical Bitcoin he minted in his shop on April 26, 2013 in Sandy, Utah. [AFP]
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The libertarian leader of one of the largest online retailers in the world has decided to step into the bitcoin fray.

Overstock.com’s CEO Patrick Byrne told bitcoin news site NewsBTC.com on Wednesday that the decision isn’t completely decided yet, because the logistics — and the law — of accepting the virtual currency have to be worked out.

Byrne’s target is the second half of 2014, but Overstock.com may be able to implement bitcoin sales as soon as April, he said. The retailer may implement a proprietary system to manage the transactions, allowing it to bypass emerging bitcoin payment processing middle men. A pilot program may last a year or two, with no marginal cost, Byrne told NewsBTC.com. One consideration would be managing currency risk in the highly-volatile bitcoin market. The value of a bitcoin has fluctuated between $500 and $1200 over the last year. The currency also carries some regulatory risk, given the crash in China earlier this week, when the country’s biggest trading platform BTC China banned deposits in yuan following new restrictions imposed by the central bank. U.S. regulators have grown increasingly concerned about the use of bitcoin as a means for money laundering.

Byrne’s move stems broadly from his ideological perspective as a critic of “fiat money” and a libertarian supporter of Ron Paul. But it also serves as a signal to other retailers that accepting bitcoin for payment may be feasible.

Reaction to Byrne’s statement have been mixed. At the Los Angeles Times, Michael Hiltzik wrote that Overstock may not solve the chicken-and-egg problem — adoption requires goods for sale, and goods won’t be marketed without a currency base. “Plainly [Byrne] hopes Overstock will be the great liberator, but as long as even Overstock is nervous about holding bitcoins for more than a few minutes at a time, that’s wishful thinking.”

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