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The Almighty Buck Bitcoin Businesses Government Politics

Overstock.com Plans To Accept Bitcoin 202

Posted by timothy from the totally-a-flash-in-the-pan dept.
SonicSpike writes "Overstock plans to become the first big U.S. online retailer to accept Bitcoin, as Patrick Byrne, the company's libertarian chief executive, warms to the virtual currency as a refuge from government control. Mr Byrne told the Financial Times that Overstock planned to start accepting Bitcoin next year – possibly by the end of the second quarter – a decision that he said was driven mainly by his own political philosophy. 'I think a healthy monetary system at the end of the day isn't an upside down pyramid based on the whim of a government official, but is based on something that they can't control,' Mr Byrne said."
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Overstock.com Plans To Accept Bitcoin More

Overstock.com Plans To Accept Bitcoin

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  • Guesses as to end effect? (Score:5, Interesting)

    by SuperKendall ( 25149 ) on Sunday December 22, 2013 @02:39AM (#45758431)

    It will be really interesting if this creates any stability in the value of bitcoin, or if not how pricing will work with something that can fluctuate in value so wildly... will the company convert BTC to cash right away, or will it keep it for a while before conversion (if ever)?

    • Re:Guesses as to end effect? (Score:4, Insightful)

      by rudy_wayne ( 414635 ) on Sunday December 22, 2013 @03:26AM (#45758547)

      .

      I think a healthy monetary system . . . . is based on something that they can't control

      As fashionable as it is to be anti-government or anti-establishment, or Let's Stick It to "The Man", a monetary system not under government control is not the answer and Mr. Byrne is full of Libertarian bullshit. The recent article "Why I want Bitcoin to die in a fire" says it perfectly. Our current monetary system sucks, but replacing it with Bitcoin would be even worse.

      Yesterday I went to a store and bought some items. Today I went back to that store and everything was still the same price, and the dollars in my wallet were still worth exactly the same as they were yesterday, and the day before, and the week before and the month before. An unstable currency that changes value from one minute to the next is an unworkable mess.

      • Dollars to sense, the U.S. dollar value is controlled, and not by a particularly trustworthy element. The answer is the gold standard.

        • Re:Guesses as to end effect? (Score:5, Insightful)

          by mishehu ( 712452 ) on Sunday December 22, 2013 @03:49AM (#45758623)
          Why yes, that's an even better idea. Let's all have the gov't hoard all sorts of gold that could actually be used for something useful instead... You'd love for your graphics card to triple in price because now the gold for the contacts and other components is all scarce now, wouldn't you? A gold standard has a big downfall in common with BTC... it's naturally deflationary. A modest rate of inflation is not necessarily a bad thing, but having to go from paying 1/4 of your net income on your mortgage now to 1/2 of your net income in 15 years doesn't sound so hot either does it?

          • Re: (Score:3, Insightful)

            by Pentium100 ( 1240090 )

            A modest rate of inflation is not necessarily a bad thing, but having to go from paying 1/4 of your net income on your mortgage now to 1/2 of your net income in 15 years doesn't sound so hot either does it?

            You know what would be better? Being able to actually save money for years to buy something and no having the money lose value until I save enough of it.

        • Re:Guesses as to end effect? (Score:4, Insightful)

          by Patch86 ( 1465427 ) on Sunday December 22, 2013 @05:48AM (#45758867)

          Yeah, because the value of gold is totally stable:
          http://www.bullionvault.com/gold-price-chart.do [bullionvault.com]

          There's a reason why every country in the world abandoned gold/silver/commodity linked currencies, and it wasn't because of a global conspiracy- it was because they were a disaster.

          • Excuse me if I'm just showing my ignorance but can we really determine what is changing in those graphs? Is it the value of the currencies to which it is measured against that changes or the value of the gold? There has been some serious money printing going on world wide which may explain the steady rise since 2003. I would speculate that the significant bullish trend in gold is a symptom of currency not being backed by something akin to a gold standard - the effect of 'Quantitative Easing' and speculation

            • Re: (Score:3)

              by thue ( 121682 )

              > Excuse me if I'm just showing my ignorance but can we really determine what is changing in those graphs? Is it the value of the currencies to which it is measured against that changes or the value of the gold?

              The prices in dollars of commodities in inflation indexes have been relatively stable. For example the price of gold doubled between 2009 and 2011 - do you remember the dollar-price of commodities doubling in the same time interval, as would be the case if it was just the dollar halving in value a

              • I'd be a fool to disagree with you since I'm not overly knowledgeable in economics, I have but a passing interest only.

                But I still have an suspicion that the recent (2003 - 2011) volatility/instability in gold is a symptom of market manipulation, QE, baseless currencies et al. Could it be that trust in cash and stocks have had some swings and a lot of speculation moved to gold causing its instability - this coupled with the belief that gold is a safer haven for one's wealth in these times of uncertainty has

          • The value of the dollar has lost close to 98% since the Federal Reserve was created in 1913 and took us off the gold standard. That's not exactly "stable" and it punishes people who save their money plus it hurts the poor because price inflation increases faster than their wages do making their buying power less and less.

            And the reason governments took their currencies off of the precious metal standards was so that they could inflate (tax) their citizens. People get up in arms when a new tax is raised, how

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        you're a retard.
        the dollar is stable because it's backed by trillions in averaging commerce and billions in liquidity. huge fucking numbers.
        bitcoin appears unstable because it has not yet reached that scale.
        it has nothing to do with the base currency, be it bitcoin, dollars, or pigs.

        • Bitcoin will always be unstable, because it is deflationary at times. You are rewarded for holding on to Bitcoins, until some critical mass is achieved and the value is high enough to spark a sell-off. You will always have a boom and bust cycle. The same thing happened when we were on the gold standard. Low levels of stable inflation discourage hoarding, with pretty mild side effects.

          • The instability will get less as it is used more. Ideally, if everyone was using bitcoin, it would be deflationary in exact correlation to the growth in worldwide product output.

            • Re: (Score:2)

              by swalve ( 1980968 )
              Which is exactly the problem. It amplifies the effects of economic expansions and contractions, which makes things worse.

      • Re: (Score:2, Interesting)

        by philip.paradis ( 2580427 )

        I could spend some time explaining several things to you, mostly things involving international currency exchanges and market volatility concerns, but I suspect that my time would be wasted. Instead, I'll simply note that Overstock.com is not the only large entity considering dealing in BTC, and a lot of smaller companies already do (and in ways that might surprise you), probably more than you suspect. At the end of the day, an old expression applies here: "money talks, bullshit walks." You're standing in a

        • "Money talks, bullshit walks" is exactly right. We just differ on which we think is bullshit. Time will sort that out.

          You go ahead and buy all the bitcoins you possibly can and hold on to it. I'll just keep my money in stocks and real estate. Come back in 2 years and let's see where we stand.

      • The value of a dollar can and does fluctuate wildly (consult any market crash) and certainly alters slowly over time. What makes it "stable" is the heavy inertia it enjoys from being tied to so many aspects of a large economy, particularly goods whose value are themselves stable. This makes it stable on average, but your analogy wouldn't work if instead of going into a store and buying an apple you went to the stock market, and it doesn't work if a major part of what the dollar is exchanged for comes unde

      • Comment removed based on user account deletion

      • You clearly have never used bitcoins to buy real goods. As someone who does use bitcoins to buy groceries and household goods, the volatility is nowhere near the problem you think it is.

        Go ahead, keep missing out. Today's millibitcoins will be tomorrow's microbitcoins.

        • 1/2 (Score:2)

          by Holi ( 250190 )

          After watching it lose half its value in one day, and after watching its value fluctuate from 200 to 1200 in under 3 months them drop by half overnight wouldn't affect its purchasing power at all.

      • Yesterday I went to a store and bought some items. Today I went back to that store and everything was still the same price,

        No they weren't.

        and the dollars in my wallet were still worth exactly the same as they were yesterday, and the day before, and the week before and the month before

        No, the value of the money in your wallet decreases every day of the year. It has no intrinsic value so it is not volatile, it only looses value.

        An unstable currency that changes value from one minute to the next is an unworkable mess.

        ALL currency is unstable. Bitcoin is just a bit more unstable. But at least with Bitcoin the instability is solely based on market conditions and not the whims of politicians. I'd argue that the "Stable" value of the dollar is mostly illusion. The dollar could crash just as quickly as bitcoin, we just have a government that's constantly meddling wit

    • will the company convert BTC to cash right away, or will it keep it for a while before conversion (if ever)?

      From TFA: "Mr Byrne said that if Bitcoin derivatives exist when Overstock starts to accept the currency it would "bank" Bitcoin and use them to hedge the risk of changes in its value. If such derivatives do not exist, he said Overstock would trade Bitcoin into dollars every day."

      Bitcoin derivatives would require a major re-write of securities law. That's not going to happen. So he would have to sell the Bitcoin immediately,

      So for those wondering what effect this will have on BTC exchange rate: It will creat

    • It will be really interesting if this creates any stability in the value of bitcoin, or if not how pricing will work with something that can fluctuate in value so wildly... will the company convert BTC to cash right away, or will it keep it for a while before conversion (if ever)?

      More like:
      a) When Bitcoin is high they'll charge a percentage and convert them straight away.
      b) When bitcoin is low they'll charge a percentage and use them speculatively, hoping to make extra money.

      ie. The "libertarian owner" believes he has the bitcoin market figured out.

      Plus it also generates a lot of publicity for Overstock, who I'd never heard of until Slashdot gave the a free plug.

  • Time to short OSTK (Score:4, Funny)

    by Anonymous Coward on Sunday December 22, 2013 @02:39AM (#45758435)

    Perfect timing! I'm always in need of new stock market ideas! Thanks Overstock.com...you made my day!

    • Re: (Score:3, Interesting)

      by Trepidity ( 597 )

      Maybe you're already referencing this, but shorting OSTK makes their CEO very angry [wikipedia.org].

  • I think you mean "O.co" [overstock.com].

  • Overstock.com still exists? (Score:3, Insightful)

    by Anonymous Coward on Sunday December 22, 2013 @03:01AM (#45758497)

    Overstock.com still exists?..... Oooooh I see what they did there.

    This press release brought to you by O.co, just a few days before Christmas!

  • Upside-down pyramids (Score:4, Insightful)

    by NoNonAlphaCharsHere ( 2201864 ) on Sunday December 22, 2013 @03:03AM (#45758505)
    Yikes. What this guy knows about monetary policy and central banking is - staggering. While national backing-free fiat currency may not be the most desirable way to do things, multiple entities issuing highly volatile (think internet speeds) banknotes of dubious value (CPU cycles? really?) is an insane step in the wrong direction.

    • Re: (Score:2)

      by Greyfox ( 87712 )
      Seems to me it just points to demand in that arena. If I were to take a wild guess (knowing very little about currency) I'd say people have fairly low faith in government-backed currencies and are looking to diversify. US treasury bonds are still the safe haven of choice for investors worldwide, and with Fox news and the US Government's own actions undermining confidence in that medium, investors are probably desperate for any place else to put their money. I'd guess like any other bubble, it'll pop eventua
      • Well, the NASDAQ is at levels it hasn't been at since 2000, and gold is trading at a 3-year low, so if I thought that the bubble was about to pop, which I actually do, and the choice of which "currency" to trade dollars for, gold or bitcoins, I know which one I'd pick. #include <std-disclaimer.h>

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      multiple entities issuing highly volatile (think internet speeds) banknotes of dubious value (CPU cycles? really?) is an insane step in the wrong direction

      I don't think you entirely understand bitcoin, or where the value of a currency comes from. First of all, there is only one issuer of bitcoin: the bitcoin network, acting in aggregate, according to a pre-agreed algorithm. Secondly, the value of almost any modern day currency is entirely a perceptual value caused by the notion that people will accept that currency at some approximately-known rate for payment for goods or services. The only reason bitcoin is highly volatile at the moment is that not many p

  • But how much will it cost? (Score:5, Insightful)

    by Animats ( 122034 ) on Sunday December 22, 2013 @03:35AM (#45758573) Homepage

    But will it be cheaper or more expensive than using a credit card?

    Accepting Bitcoins is surprisingly expensive. There's a volatility risk, and for a currency that can change by 10% in minutes, that's a real problem. Coinbase (which is a dealer, rather than an exchange) has a posted buying price, good for one minute, and some shopping cart systems use that. But that price is usually lower than the prices on the major exchanges; there's a conversion cost. So, as with retail money-changers, you pay a conversion fee. Also, like most money-changers, Coinbase will briefly stop buying during periods of high volatility or if they have trouble unloading their Bitcoins.

    Then, of course, there's prying the money out of the Bitcoin broker or exchange. Overstock is probably in a strong enough position to demand a daily sweep into a real bank account, with serious penalties for failure to deliver.

    If you look at the few Bitcoin-accepting businesses that sell real products with typical mail order retail markups, the Bitcoin price is usually significantly higher than the US$ price. Most of the stores that currently accept Bitcoin are selling T-shirts, posters, remaindered goods, and similar crap. [spendbitcoins.com] Of course, that's what Overstock does, so it may be a good fit.

    • Re:But how much will it cost? (Score:5, Insightful)

      by rudy_wayne ( 414635 ) on Sunday December 22, 2013 @03:44AM (#45758611)

      But will it be cheaper or more expensive than using a credit card?

      Accepting Bitcoins is surprisingly expensive. There's a volatility risk, and for a currency that can change by 10% in minutes, that's a real problem. Coinbase (which is a dealer, rather than an exchange) has a posted buying price, good for one minute, and some shopping cart systems use that. But that price is usually lower than the prices on the major exchanges; there's a conversion cost. So, as with retail money-changers, you pay a conversion fee. Also, like most money-changers, Coinbase will briefly stop buying during periods of high volatility or if they have trouble unloading their Bitcoins.

      And there's the problem. Bitcoins aren't real money. Before you can spend them you have to convert them into something (dollars, euros, whatever). Meanwhile, the paper in my wallet doesn't need any conversion.

      • I'm not sold on the idea of Bitcoin, but that's not exactly a solid argument against Bitcoin over the long term. You'd have trouble converting any currency into goods before the currency became widely accepted. There's a lag time for adoption with any attempt at a currency, even ones mandated by law, so it's no surprise that a currency that's essentially discovered and adopted by word of mouth takes a long time to be truly useful in all situations.

      • Re: (Score:2)

        by Bert64 ( 520050 )

        Meanwhile, the paper in my wallet doesn't need any conversion

        Assuming you are trying to spend it in retailers which accept that particular type of currency... Try spending it in a foreign country and you'll have to convert it. Bitcoin is no different, some retailers will accept it and some will not.

        • Re: (Score:2)

          by meglon ( 1001833 )
          Actually, i use my US DOLLAR based credit card fairly often with a couple UK POUND based businesses, and their carts do the exchange for me. Why? Because US DOLLARS and UK POUNDS have the backing of their countries, as opposed to bitcoin which has the backing of.... what... rabid anti-government idiots, and financially questionable con men looking for the next score?

          I'll take society over criminal wanna-be's any day of the week.

          • Re: (Score:2)

            by Richy_T ( 111409 )

            The credit card company typically does the conversion. And they'll charge you handsomely for it too.

      • It'll become real money when enough people start accepting it for goods.

        Though if that happened, it'd also become a tax-evasion, embargo-busting, money-laundering criminals' dream. Government would have no option but to intervene and regulate, putting everything right back where it started.

      • Meanwhile, the paper in my wallet doesn't need any conversion.

        Try giving the paper in your wallet to Overstock.com

      • Federal Reserve Notes (dollars) aren't real money either in case you haven't noticed. The difference between BTC and USD? One is centrally controlled by the government, the other is peer-to-peer.

    • Re: (Score:2)

      by satuon ( 1822492 )

      Even if it is more expensive, it doesn't matter, because if you're holding Bitcoins, you need to convert them anyway, so you'll be hit with the conversion cost no matter what.

    • Re: (Score:2)

      by AmiMoJo ( 196126 ) *

      I guess he is looking at the longer term view that bitcoin will become a more useful currency that doesn't need exchanging so much. More interesting to me is that overstock sell hardware for mining BTC, so there must be a point at where using it to mine would be cheaper than selling it.

  • Obviously the guy has some problem with how his government controls money creation.

    But instead of attempting to fix the way the government works, he want to jump on bitcoin, for which money creation rules are not obvious. We have no proof there is not someone with a secret way to create bitcoins.

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