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Bitcoin Businesses The Almighty Buck

Dell Starts Accepting Bitcoin 152

Posted by Soulskill
from the strength-in-numbers dept.
An anonymous reader writes: Mainstream retail companies have been slow to adopt Bitcoin, perhaps skeptical of its long-term value or unwilling to expend the effort required to put a payment system into place. Today, Bitcoin adoption got a momentum boost with Dell's announcement that it will accept Bitcoin as a payment method. Dell is by far the biggest company to start accepting Bitcoin. It's interesting to note that Dell, like many of the larger companies interacting with Bitcoin right now, is doing so through a third-party payment processor. On one hand, it's good — we don't necessarily want each company building their own implementation and possibly screwing it up. On the other hand, it scales back slightly the decentralized and fee-less nature of Bitcoin, which are important features to many of its supporters.
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Dell Starts Accepting Bitcoin

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  • Makes sense (Score:5, Insightful)

    by hodet (620484) on Friday July 18, 2014 @02:57PM (#47484845)

    The bitcoin community is highly technical. They will probably sell a lot of systems making it available as an option. They will convert their bitcoin to cash instantly minimizing currency risk.

    • Re:Makes sense (Score:5, Interesting)

      by Charliemopps (1157495) on Friday July 18, 2014 @04:07PM (#47485325)

      The bitcoin community is highly technical. They will probably sell a lot of systems making it available as an option. They will convert their bitcoin to cash instantly minimizing currency risk.

      I know a lot of highly technical people, and I don't know a single person that owns a single bitcoin... so I question your conclusions. I hear a lot of talk about bitcoins, but not much about who has any sizable assets in bitcoins so I sometimes question if the entire market might just be 1 random guy scamming us all.

      • by LF11 (18760)
        Because the smart ones don't talk about it. Think about it: if bitcoin takes off (and the next bubble is proceeding along right on schedule) and bitcoin does poke north of 100k each, what do you think is going to happen to everyone who mentioned having any?
        • by PopeRatzo (965947)

          and bitcoin does poke north of 100k each

          *teehee*

          I can get you a good deal on some beanie babies.

          • It'll be at least three years. I'm not worried, anybody that thought big retailers would ever even acknowledge its existence were nuts and now look.
          • Ty Warner, the inventor of beanie babies, is worth $2.6 billion. Do not scoff at collectibles.

            • by PopeRatzo (965947)

              Ty Warner, the inventor of beanie babies, is worth $2.6 billion.

              Yeah, but he didn't buy any.

      • by hodet (620484)

        Let me rephrase. There are some highly technical people in the bitcoin community. There are some not so technical people as well. There are many technical people not involved in bitcoin. It's a big world man.

      • I think a more accurate description of the Bitcoin community would be "highly greedy" or "has a poor understanding of economics". I don't think technical has anything to do with it. In fact if you've some technical knowledge, some understanding of the size of the financial system, and then knowledge about the bitcoin protocol you quickly come to the realization that it has a deal breaker problem (it has several in fact) and that is that it can't scale to be the amazin' world wide currency the faithful want

        • by itzly (3699663)
          I have some bitcoins, and I don't find myself in any of the 4 categories. I just think bitcoins are a worthwhile addition to the numerous existing ways to store and transfer value. It has some advantages and some disadvantages, but there are enough different applications in the world that it will find its niche where the advantages outweigh the disadvantages.
      • by ultranova (717540)

        I hear a lot of talk about bitcoins, but not much about who has any sizable assets in bitcoins so I sometimes question if the entire market might just be 1 random guy scamming us all.

        Who are you going to scam if you're the only one in a market? Yourself?

    • The bitcoin community is highly technical. They will probably sell a lot of systems making it available as an option.

      Sure, what with Dells being so popular with the highly technical community.

      • by hodet (620484)

        Laptops are commodity items. Jaguars are popular with rich people. Some rich people drive crappy old Honda Civics. What's your point again?

        • by PopeRatzo (965947)

          Some rich people drive crappy old Honda Civics.

          Citation?

          • by hodet (620484)

            http://www.forbes.com/sites/jo... [forbes.com]

            Quote from the article
            "But what that analysis also told me was that 61 percent of people who earn $250,000 or more aren’t buying luxury brands at all. They’re buying the same Toyotas, Hondas and Fords as the rest of us. So what cars are preferred by the rich?"

            • by PopeRatzo (965947)

              Still doesn't say anything about Civics. It just lists the brands, not the models. I'm guessing Accords at least. So, Prius and Camry over Varis and Mustangs and larger Fords over Fiestas.

    • by mysidia (191772)

      Maybe, but I am sure that is not what this is about. Dell is trying to get more business from members of the Bitcoin community who get all excited and extremely enthusiastic and start buying when a vendor starts accepting their coins.

      In other words.... it's not about Bitcoin users being technical or not..... just a way to drum up some additional business for Dell, and to increase margins for some transactions, since banking fees will be much lower.

      • by itzly (3699663)
        Not only are the fees lower, they are fully paid by the buyer. And also, Dell doesn't have to worry about charge backs.
  • by Anonymous Coward

    Dell is using coinbase to convert the bitcoins to dollars, because no large business in their right mind would store any real assets in bitcoins.

    If anything, this demonstrates another example of how bitcoin will never catch on as an actual currency. It's a middleman at best (real money converted to bitcoins, bitcoins converted back to real money).

    • by bondsbw (888959)

      If anything, this demonstrates another example of how bitcoin will never catch on as an actual currency. It's a middleman at best

      "Actual" currency is just the middleman to trading goods and services. So I guess dollars will never catch on either.

      • The middleman being the federal government.

      • by Enry (630)

        Actual currency has a value that's generally standardized and stabilized by the output of the economy of the country and its value is backed by the government. For all its faults, fiat currency is way more stable over time than bitcoin and its derivatives.

        • by bondsbw (888959)

          For all its faults, fiat currency is way more stable over time than bitcoin and its derivatives.

          Are you seriously comparing the length of time most government currencies have been around to a virtual currency 5 years old?

          Besides, government-backed currencies aren't immune to crashing. In particular, if the government thinks it's a good idea to create itself an enormous amount of new money, that currency will likely fail. (Something that doesn't happen with Bitcoin and derivatives because, by design, supply will be limited over time.)

          • by manu0601 (2221348)

            if the government thinks it's a good idea to create itself an enormous amount of new money, that currency will likely fail.

            Not always. Central banks created huge amount of money to save banks after the subprime crisis, and it did not hurt the currencies. Economists tells us the increase of currency will not hurt when used during a depression, because it will not fuel prices increases.

            • by bondsbw (888959)

              From what I'm seeing at http://en.wikipedia.org/wiki/M... [wikipedia.org], the Federal Reserve did appear to create a larger amount of money than normal during that period, but not on the scale I meant with "enormous". I was talking about doubling the money supply in a year or two (or worse).

              I agree that inflation helps the economy by driving people to spend money instead of hoarding it. A little more inflation during a depression is needed to offset the effects of the depression. But that only works to a certain degree

              • by manu0601 (2221348)

                The ECB created 1 trillion euros within 2 months to save the banks, while 30 trillions euros existed. Tthis is a 1/30 increase, this is rather huge.

                I agree with you about inflation, but we are very far from the point where USD or EUR are dumped for other currencies. We live the opposite excess, in fact.

          • by Enry (630)

            I never said they were immune to crashes, but I did say that the value of the money is based on the economic output of the country. So while the USD isn't backed by gold, it's backed by something much more valuable.

            • by itzly (3699663)
              And if there's a community of bitcoin users trading good and work for bitcoins, so will bitcoin be backed by the total economic output of the users.
      • by Junta (36770)

        "Actual" currency is just the middleman to trading goods and services.

        But people 'save' currency and plan retirements around quantities of it and such. Value fluctuations are real and troublesome of course, but in general this works. I give a company 30,000 dollars and they will keep it in an account for some non-trivial time and report their quarterly success in terms of those figures. They will at least talk about the value of currency in a manner that assumes pretty much absolute stability over 3 months and even project their expectations for how much money they will ge

      • If anything, this demonstrates another example of how bitcoin will never catch on as an actual currency. It's a middleman at best

        "Actual" currency is just the middleman to trading goods and services. So I guess dollars will never catch on either.

        No. Goods and services are not only traded using currency. They may be traded using other non-currency assets as well. However trading assets has a capital gain/loss tax implication in the U.S.

        A recent IRS advisory said virtual currency is to be treated as an assent not a currency. So lets say you receive some bitcoins. At some future date you spend these bitcoins. Since these bitcoins are an asset you have to account for their gain or loss in value for the days that you held them and declare a loss or g

        • by bondsbw (888959)

          No. Goods and services are not only traded using currency. They may be traded using other non-currency assets as well.

          Where is the strawman you are arguing against that said the word "only"?

          • by perpenso (1613749)

            "Actual" currency is just the middleman to trading goods and services.

            No. Goods and services are not only traded using currency. They may be traded using other non-currency assets as well.

            Where is the straw man you are arguing against that said the word "only"?

            Currency is not **the** middleman, it is **a** middleman.

            I'm not arguing against bitcoins. I'm pointing out that it is an asset in various legal jurisdictions and that this has huge implications that are only now coming to light.

            • by bondsbw (888959)

              You totally missed the point of my post.

              I don't know why you got hung up on the word "the", when the point was to refute the assertion that a middleman is worthless. I never said it was a currency middleman or an asset middleman... and I don't disagree with your analysis... but that makes no difference to my argument.

    • by Cardoor (3488091)
      dell, as most large public companies in the U.S. , report earning in USD.. so much like a company doing business abroad in Euros or pounds, will ultimately need to convert their non-usd accounts back to USD for reporting purposes. by your argument, dell selling computers in france and generating euros would be a sham because they then call their bank to convert to USD (their reporting currency) at some point.

      As things stand now, there isn't an effective method for hedging BTC exposures, and you couldn't
      • by Junta (36770)

        by your argument, dell selling computers in france and generating euros would be a sham because they then call their bank to convert to USD (their reporting currency) at some point.

        If 'at some point' is 'when tax laws and reporting make it most effective' it is a bit different than 'at some point' being seconds after the sale, with quotes longer than 15 minutes being considered invalid.

        Notably dell will announce products with MSRP in dollars, euros, pounds, etc. They will not do the same in BTC, they will instead do a just-in-time quote that is invalid about as quickly as they can get away with. There is no even vague assumption about BTC value from one hour to the next, unlike the

    • by PRMan (959735)

      Overstock is now keeping 10% of their bitcoin sales in bitcoin:

      http://newsbtc.com/2014/05/02/patrick-byrne-overstock-com-10-percent-bitcoin-income-bitcoin/ [newsbtc.com]

      • by unrtst (777550)

        I just noticed a couple days ago that newegg.com is also accepting bitcoin. Not sure how long they've been doing that, but it made me wonder how many other places where. The list in TFS was a surprise to me.

        • The two largest payment processors, Coinbase and BitPay, have about 65,000 merchants they accept bitcoin on behalf of and convert. The merchant gets local currency deposited to their accounts. There are an unknown number of places that take bitcoin directly, like our Seed Factory Project ( http://www.seed-factory.org/ [seed-factory.org] ).

          You can spend bitcoin indirectly at many major merchants through Gyft ( http://www.gyft.com/buy-gift-c... [gyft.com] ). Note the "shop with bitcoin" item in the top menu. Gyft sells you a gift card

  • by Isca (550291) on Friday July 18, 2014 @02:59PM (#47484857)
    ....It needs to go through a middleman.

    Employee Wages and benefits
    Suppliers
    Taxes
    Real Estate
    Utilities

    Most all of these things need cash. And even if they could be paid in bitcoin most companies wouldn't want to do that infrastructure themselves and would outsource it.
    • Of course they are converting it, but if they have a supplier in China that will accept Bitcoin too and they want prefer using Bitcoin to save days and thousands of $ in processing fees. Have you ever done an international wire transfer? It's long and painful while Bitcoin is free and instant. Nobody expected the market to change at once, just like the email didn't remove all fax machines at once, but 1 at the time.
      • by Kjella (173770)

        Large companies don't have the same kinds of issues small companies have. For one they're likely to do net exchange after they've paid off all expenses in that currency and large volumes get better rates very close to the interbank rate. I know my bank charges the interbank rate + 1.75% for foreign exchange, that's fine if we're talking about small sums but if I was buying say a $400,000 vacation home abroad I sure wouldn't be paying $7000 in fees. There are services that specialize in this, but the average

    • by TeknoHog (164938)
      IOW, nobody should use $new_tech until it works everywhere?
      • IOW, nobody should use $new_tech until it's conclusively demonstrated that universal buy-in won't result in one individual (or group of individuals) owning trillions of dollars in wealth.

        Here's looking at you, Satoshi Nakamoto.
        • by itzly (3699663)
          Nobody should have bought Microsoft products until Bill Gates had conclusively demonstrated he wouldn't get billions of dollars.
          • I agree.

            People like Bill Gates are personally responsible for the absurd wealth disparity in this country.

            But Bill only has a few tens of billions. Satoshi owns over 7% of the total number of BTC that will ever exist. If BTC become the world's primary currency, then the $240T in global wealth will be spread over the 21M total possible BTC, leaving Satoshi wealthy to the tune of $17T, or several orders of magnitude more wealthy than Bill (without even accounting for the expansion of the economy between n
            • What would happen in practice if Satoshi now started to convert his mountains of Bitcoins to U.S. dollars?
              • It would probably have some effect on confidence in BTC. I have no idea how significant the effect would be.

                However, were BTC to achieve universal adoption as some sort of de facto global currency, it's not unreasonable to think that it would at least be possible for him to cash out (or rather, buy 7% of everything in the world) without totally destroying the BTC economy.
            • by itzly (3699663)
              If he still has all his coins, and wants to use them to cause trouble in the world, the solution is only a hit man away.
    • This. It's the the thing that the "it scales back slightly the decentralized and fee-less nature of Bitcoin, which are important features to many of its supporters" crowd doesn't grasp. (One of the many things about how the real world works that many BTC fanboys don't grasp.)

    • by antdude (79039)

      FYI. It's = It (i/ha)s.

  • How do they forward the taxes owed to the IRS? Or is it just considered barter?
    • by itzly (3699663)
      They just convert it to dollars.
    • by Sycraft-fu (314770)

      You pay taxes in US Dollars in the US. You need to convert anything to that. Like if you sold a bunch of goods to someone in Europe and got paid in euros. No problem, and you can keep some of that in Euros if you like, but you need to sell some of those Euros to a bank (or other entity) and get dollars to pay the IRS. They only take dollars.

    • Dell is using a payment processor, Coinbase, ( https://coinbase.com/ [coinbase.com] ) who accepts bitcoins on their behalf. Coinbase deposits dollars to Dell's bank account, and resells the coins to individuals, and on exchanges. So Dell never handles bitcoins themselves, just dollars like usual.

  • it scales back slightly the decentralized and fee-less nature of Bitcoin

    Fee-less? Like the charges that all the credit card processors levy? ...or do you mean hidden fees that are just passed on to the customer?

    • by PRMan (959735)
      You can send any amount of bitcoin anywhere in the world for free. The miners usually choose to take the ones where a fee was attached (in order of highest fee because that's partially how they get paid), but someone sent $3 million USD for free a few months ago, so it can happen.
      • by itzly (3699663)
        Old coins get premium treatment in the transaction scheduling algorihm. I suspect those $3 million were old coins. For new coins, you need a fee to get them transferred within a reasonable time.
  • You can bet every computer purchased through BitCoin is going to make a stop by the NSA. Buying a computer with untraceable currency AND having an interest in cryptography!? Either one alone would get you labelled an "extremist."

    • by Isca (550291)
      Most anyone out of the country is already choosing not to purchase american built (or processed) equipment after the NSA scandals so it really doesn't matter now at this point does it?

      I suspect it'll be a long time until it does.
    • Untraceable (Score:4, Informative)

      by ArcadeMan (2766669) on Friday July 18, 2014 @04:17PM (#47485423)

      I wish people would stop using the term untraceable when talking about those crypto-currencies, because the blockchain will forever hold every single transaction it has ever processed. It's the complete opposite of untraceable.

      • ... the blockchain will forever hold every single transaction it has ever processed. It's the complete opposite of untraceable.

        That depends on what you're trying to trace. While it's true that the transactions themselves are public knowledge, they don't include any personally identifiable information. Tracing the movement of bitcoins through a series of single-use addresses on the blockchain is easy; tracing the changes in real-world ownership is an entirely different matter. Unlike money moving through a series of bank accounts, there is no central entity to tell you who controls each address.

    • by PRMan (959735)
      Are they loading Windows on it? Then it probably doesn't matter.
  • they're accepting GE stock because I can sell stock to a third party and use the money to buy a Dell product. Makes for a good headline though.
    • by Guspaz (556486)

      By your reasoning, Dell doesn't accept credit cards either.

      • By your reasoning, Dell doesn't accept credit cards either.

        Credit cards don't claim to be currency either, nor does the company accepting it have to worry they'll be able to turn the receivables into cash. Bitcoin, however,is not s liquid so if Dell accepted Bitcoin they could be stuck with a large stash that is not easy to turn into cash. Credit cards also let you make large purchases, depending on your credit limit. A million dollar Bitcoin buy may be much more difficult since the processor is assuming all the risk while giving out cash with no assurance stye Bit

  • How much is that computer? Three billion Doge!

    • by TeknoHog (164938)
      If you want to use Doge to pay for computers, there's at least Bitelectronics [bitelectronics.net]. I have no connection to them except being a happy customer (in the same country though, I can't speak for their international shipping).
  • it scales back slightly the decentralized and fee-less nature of Bitcoin, which are important features to many of its supporters.

    This is a dumb complaint. Even if you think Bitcoin is great, there's no way it's going to do away with financial middlemen and transaction fees. Those things exist for too many different reasons. And even the fees it will eventually do away with, there would have to be some intermediate state between now and then, where businesses rely on some other business to deal with the processing of Bitcoin transactions, since Bitcoin hasn't become accepted as real currency yet.

    Oh yes, I know, I'm going to get a

    • by Junta (36770)

      If I can pay my bills or buy something with Bitcoin, it's the exception and not the rule

      That's a low bar to set. If you can get a price or invoice in BTC that gives you a month to pay it off, then I'll start considering it a viable 'currency'. Accepting bitcoin with just-in-time pricing is very low risk and it's cheap for a company to do that for publicity with no downside. A company need not believe in bitcoin in all to do it. A company believes in bitcoin if it will commit to a long term price for anything it supplies or purchases.

      • This is a good point.
  • Whenever there is any serious bitcoin news, I come here to read the bitter comments. Just a few months ago, I was seeing comments such as, "wake me up when a REAL retailer like Amazon or Dell takes bitcoin."

    Well, now Dell takes bitcoin. Don't you think maybe you should read up a little about how this newfangled Public Key Cryptography works? These damn kids and their goddamn bubbles. Shoulda bought when it was $50 last year, you'd be paying off your house...

    But now it's over $600!!!!!! NO WAY are you go
    • Well said. There was the same kind of negativity back in the 90's when the internet as a whole was taking off. The ones who missed out gradually turn from whining to reluctantly adopting, then it went mainstream like it was perfectly natural from the get-go.

      The same will happen with digital currency. The mentality is not unlike the stock market. The ones who whine the most are the ones who didn't expend the effort to understand stuff early and therefore missed out. It's happened before and will happen

      • Thanks. It is wierd watching it happen, though. One would think that people would start giving it the benefit of the doubt, though. I am surprised at how strenuous the naysayers are and how much they seem to lack even basic technical curiousity about this new technology.

        You are correct, though. Perhaps it is just wierd because this particular technology moves much faster than many, and its very nature is an affront to certain well-cherished white elephants.
        • by ultranova (717540)

          I am surprised at how strenuous the naysayers are and how much they seem to lack even basic technical curiousity about this new technology.

          No one likes to admit they're wrong, and the more strongly you've committed to a position, the stupider you'll feel when the evidence becomes undeniable. That's why, at some point, it always stops being about issues and starts being about persons: people are not defending their position anymore, they're defending themselves. It's one of the more annoying failure modes o

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