Overstock.com Accepting Bitcoin....Sorta

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Overstock.com CEO Patrick Byrne has announced that his company will soon accept bitcoin as payment. The catch? To avoid taking a hit, the company will convert your bitcoin payment into U.S. dollars before applying it to your purchase.

Any retailer holding bitcoins for any length of time, therefore, is asking to be slaughtered. Overstock is no exception. "We'll want to avoid any currency exposure by converting bitcoins to dollars as soon as they come in," Byrne told me, evincing rather more faith in the stability of the USD than the BTC.
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Maybe soon enough they'll convert US dollars to Bitcoin to avoid taking a hit.
 
As a business, I would never accept bitcoin for payment. As a business, I'd never accept any form of currency that has a 10,000% swing in value over the course of a year.
 
teh_chem said:
As a business, I would never accept bitcoin for payment. As a business, I'd never accept any form of currency that has a 10,000% swing in value over the course of a year.
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Bitcoin is so volatile and so many people are desperate for it to work that i think taking bitcoins now in the short term is a decent gamble.
 
"Will overstock be bitcoins great liberator"

They don't seem to have much faith in bitcoins to be their great liberator if they're converting before payment.

Hi, welcome to my shop. I accept payment in cows, stamps, baseball cards and pez dispensers. Just let me convert them to USD first.

Overstock is so cutting edge.
 
Spire3660 said:
Bitcoin is so volatile and so many people are desperate for it to work that i think taking bitcoins now in the short term is a decent gamble.
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As an individual, maybe. As a business, it's a very bad business decision. Especially now that it's at an all time high and its value is almost entirely based on speculation. Bitcoin was a money grab for its creators, early adopters, and industrial miners. It's worthless for anyone else and is no better than any the federally-backed/recognized world currencies. Bitcoin had become a self-contradiction as a currency.
 
Reloadin said:
"Will overstock be bitcoins great liberator"

They don't seem to have much faith in bitcoins to be their great liberator if they're converting before payment.

Hi, welcome to my shop. I accept payment in cows, stamps, baseball cards and pez dispensers. Just let me convert them to USD first.

Overstock is so cutting edge.
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Um, it makes sense with the volatility. The difference between seconds could mean the difference between red and black. They are still looking for a means of hedging. Smart.
 
teh_chem said:
As an individual, maybe. As a business, it's a very bad business decision. Especially now that it's at an all time high and its value is almost entirely based on speculation. Bitcoin was a money grab for its creators, early adopters, and industrial miners. It's worthless for anyone else and is no better than any the federally-backed/recognized world currencies. Bitcoin had become a self-contradiction as a currency.
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Every "currency" has to start somewhere... I like the idea of crypto, but probably as an asset class of its own. Far too much volatility presently for it to survive as a form of exchange (i.e. traditional currency). I'm certain there will be volatility compression in the future. At the end of the day, it all comes down to what people are willing to pay and right now, BTC has "value". It's true value is yet to be seen.
 
If it can save ME the trouble of converting beforehand, I'd say this is a good service!
 
A bitcoin's value is based entirely on its privacy factor. What is being "mined" is essentially the anonymity of currency with computational confirmation. Therefore, the value should be in proportion to the demand for privacy. It follows that illegal uses would be a major issue. Also, it's effectively making private transactions a commodity, which is going to be volatile when privacy is such a huge issue currently, not to mention the fact that most people aren't capable of putting a real value on something so ephemeral. It's like the NSA making a currency based on the value of mined information; what they're really after is metadata. Therefore one could say that a virtual crypto-currency like Bitcoin has a value effectively based in leaving metadata blank; as the value of metadata increases, so does that of the Bitcoin.
 
Maxx said:
A bitcoin's value is based entirely on its privacy factor. What is being "mined" is essentially the anonymity of currency with computational confirmation. Therefore, the value should be in proportion to the demand for privacy. It follows that illegal uses would be a major issue. Also, it's effectively making private transactions a commodity, which is going to be volatile when privacy is such a huge issue currently, not to mention the fact that most people aren't capable of putting a real value on something so ephemeral. It's like the NSA making a currency based on the value of mined information; what they're really after is metadata. Therefore one could say that a virtual crypto-currency like Bitcoin has a value effectively based in leaving metadata blank; as the value of metadata increases, so does that of the Bitcoin.
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Bitcoin's principle when it was announced and deployed was that it used cryptographic system/calculations to verify the authenticity and ownership of the currency, and to ensure the integrity of bitcoin transactions--it was never discussed as a currency to be used to ensure privacy or clandestine transactions, that just came after the fact.
 
I don't think I can think of any mainstream/legitimate business that doesn't do this if they accept Bitcoin, If I'm a business then I certainly wouldn't keep something in my possession that can change by dozens of percent in value in the space of a week.
 
Yakk said:
If it can save ME the trouble of converting beforehand, I'd say this is a good service!
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Pretty much. I see it much the same as using a foreign credit card or some such. It's not like a US store accepting GBP, but the effect is much the same since you the customer don't have to go to a bank or currency agent to convert it yourself before making the purchase.
 
Falling Anvil said:
I don't think I can think of any mainstream/legitimate business that doesn't do this if they accept Bitcoin, If I'm a business then I certainly wouldn't keep something in my possession that can change by dozens of percent in value in the space of a week.
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Well seeing as they probably aren't relying on it to be their mainstream currency, they are probably leveraging some of their stock to attain a decent amount of coin, the stockpile could become a good gamble, at worst they lost some stock at minor value to themselves.

I'm calling short term money grab.
 
teh_chem said:
As a business, I would never accept bitcoin for payment. As a business, I'd never accept any form of currency that has a 10,000% swing in value over the course of a year.
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I work for a large online retailer. and you got it all wrong. Businesses take middleman coin exchange company to accept the bitcoins and get conversion in the dollar amount on that day. the rest of the "holding risk" is mitigated to the coin exchange company. So you simply accept the amount bitcoins according to it's value of that day that equals to the value of the item which you are selling.
 
triarii3 said:
I work for a large online retailer. and you got it all wrong. Businesses take middleman coin exchange company to accept the bitcoins and get conversion in the dollar amount on that day. the rest of the "holding risk" is mitigated to the coin exchange company. So you simply accept the amount bitcoins according to it's value of that day that equals to the value of the item which you are selling.
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I don't understand how this is accepting bitcoin; it's just offering an up-front exchange at the point of transaction? Does the retailer ever have possession of bitcoins? If it's like this example of overstock, it's no more accepting bitcoins than an overseas company 'accepting' US currency, provided it's exchanged to the currency of the company's operations location first. I don't see how this gives anymore validation to bitcoin, not does it help any of the valuation issues either. If anything, it's a reaffirmation that strong companies don't find value or stability in the currency; which is what bitcoin needs for proper acceptance.
 
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