First Day with Bitcoin, Overstock Does $126,000 in Sales

CommanderFrank

CommanderFrank

Cat Can't Scratch It
Joined
May 9, 2000
Messages
75,399
It looks like Bitcoin was a big hit over at Overstock.com. On the first day the online company began to accept Bitcoin as payment for goods, the company rang up $126K in Bitcoin sales. This may have been a test situation for many of the Bitcoin customers, but so far all parties involved are happy with the transactions. Only time will tell if Bitcoins will make a difference in sales for Overstock.

Overstock declined to tell us how its first day of Bitcoin purchases compared to its overall daily take. But the point is a healthy number of people are well and truly behind the digital currency.
Click to expand...
 
With the size of their business they can afford to risk it.

@ 800 each - they raked in about 150BTC

all it takes is one price spike to $1000 and suddenly they made $30,000 in extra profit.

Kudos to them -- sure there is an element of gambling to it, but the more risk the more reward. What if 2014 is the year BTC explodes to 1500? 2000? suddenly overstock just made a literal pile of money selling nothing but trinkets.
 
collegeboy69us said:
With the size of their business they can afford to risk it.

@ 800 each - they raked in about 150BTC

all it takes is one price spike to $1000 and suddenly they made $30,000 in extra profit.

Kudos to them -- sure there is an element of gambling to it, but the more risk the more reward. What if 2014 is the year BTC explodes to 1500? 2000? suddenly overstock just made a literal pile of money selling nothing but trinkets.
Click to expand...

There's no way they're holding BTC. There are a few services that handle the back end for BTC transactions like this.

Cue the, "Bitcoin in a pyramid scheme, man. It's never going to catch on!"
 
Wonder how much the people that used Bitcoins for the transactions will be happy if the value of the coins jumped up $300 tomorrow. Or how happy overstock would be if it fell by 75% tomorrow?

Forget the pyramid scheme, bit coin value is to unstable to be a viable currency.
 
While I see this as a potential nightmare for retailers (value dropping) it does help the BTC ecosystem since more usage (especially as a currency and not a commodity) helps soften price fluctuations.

One big issue with bitcoin for some is how to actually use/cash it out.
We have all heard the stories about someone who forgot they had 100 btc and woohoo now they have 100K...but actually cashing out large amounts like that was a pain, now you can divert some of that to traditional goods.
 
Computer Ed said:
Wonder how much the people that used Bitcoins for the transactions will be happy if the value of the coins jumped up $300 tomorrow. Or how happy overstock would be if it fell by 75% tomorrow?

Forget the pyramid scheme, bit coin value is to unstable to be a viable currency.
Click to expand...

That's very short-sighted. It's like saying people who bought the first blu-ray player, which cost $1000, should feel bad that they're an early adopted, or people who bought GOOG during its IPO lost out now that it's 13 times its price.

Second, as I stated, Overstock is not holding bitcoins. There's nothing for them to lose due to volatility. Items are priced in real time.
 
Rylan said:
That's very short-sighted. It's like saying people who bought the first blu-ray player, which cost $1000, should feel bad that they're an early adopted, or people who bought GOOG during its IPO lost out now that it's 13 times its price.

Second, as I stated, Overstock is not holding bitcoins. There's nothing for them to lose due to volatility. Items are priced in real time.
Click to expand...

Not until they try exchange the bitcoin or use it to purchase something else.
 
Rylan said:
That's very short-sighted. It's like saying people who bought the first blu-ray player, which cost $1000, should feel bad that they're an early adopted, or people who bought GOOG during its IPO lost out now that it's 13 times its price.
Click to expand...
Yeah, but blu-ray players didn't fluctuate over night (unless it was a mega-sale like Black Friday). But it's true though, look at other BTcoin threads there how many people have posted "Oh I had XX bitcoins and sold them for $40 a year ago, I would have $ZZ,ZZZ today if I kept them!!!.."
 
I think the big issue is well.. the ability to last. Right now, there are a relative few people with a ton of money in Bitcoins. Its no longer feasible to mine for them unless you have an ASIC (does anyone know if a cheap, sub $500 ASIC is even worthwhile these days?). Buying BTC is only for those with huge amounts to invest, when a single coin is $1000. So you have those with a ton of money invested in mining rigs, or those with tons of money invested in buying BTC itself as a commodity. Some of these people are going to hold onto their BTC, others are going to cash in for dollars/euro etc.. to spend it.

Nobody however, seems to be using the damn thing as an actual currency or even a reasonable store of value. There's very few ways for new users to enter the market in any affordable way. So what is going to happen when those with the big money in BTC start cashing it in, buying stuff, and those bitcoins are then sold, converted for dollars at an exchange somewhere, and then what? Its just going to be the same wealthy owners of bitcoins or dollars exchanging them back and forth - there's no actual usefulness for them, especially to regular people. I remember "Oh, it will be transaction fees that will keep it going etc..", but that doesn't seem to be coming to fruition.

It just seems like yet another win for speculators, a few people who got lucky, and those with a lot of money to invest into either coins themselves or mining equipment - and a waste for everyone else. I'm sure Overstock did a lot of sales initially with people sitting around with $1000 bitcoins burning a hole in their pocket, but I can't see it as much of a long term currency. Its more like finding out newegg/amazon would allow you to purchase in pure gold bars (which they'd then exchange for dollars etc..)... functionally useless, except to those who already have lots of gold bars and/or lots of money invested in the commodity.
 
Xaeos said:
I think the big issue is well.. the ability to last. Right now, there are a relative few people with a ton of money in Bitcoins. Its no longer feasible to mine for them unless you have an ASIC (does anyone know if a cheap, sub $500 ASIC is even worthwhile these days?).
Click to expand...

Not that I am aware of. Always get a chuckle at seeing people try to offload Bloc Erupters for $50 and $60 on the forums. Considering you can buy them for $30 on Amazon and still have to wait 3+ months to get your money back with cheap electricity, it is not exactly a forward thinking model for revenue.

Some of the Butterfly systems are powerful enough to make mining worth it, but frankly, if you're willing to speculate with $5,000 or more in hardware, you're better off speculating by just renting the mining hardware from them. Will be lovely to have a $6,000 paperweight in 18 months.
 
Services like Bitpay are making it easier & easier for businesses to transact directly in Bitcoins rather than having their customers first converting to local currency.

I think btc has become much more of an investment medium rather than a currency, but being able to buy directly with them with your profits is really nice actually. :)
 
gossipninja1 said:
While I see this as a potential nightmare for retailers (value dropping) it does help the BTC ecosystem since more usage (especially as a currency and not a commodity) helps soften price fluctuations.

One big issue with bitcoin for some is how to actually use/cash it out.
We have all heard the stories about someone who forgot they had 100 btc and woohoo now they have 100K...but actually cashing out large amounts like that was a pain, now you can divert some of that to traditional goods.
Click to expand...

I sold some and had money in my bank two days later. No slower than transferring from a savings account to a debit account.
 
Look argue it any way you like but a CURRENCY needs a level of stability to be viable. When you go buy a loaf of bread your dollar is worth a dollar. While the price for the load might change over night the change is usually within a single percentage point or so. When the currency changes value over night by 300% or more there is no stabilization and the market collapses.

Bitcoin also has no guarantee backing it. Go out tomorrow and your dollar will still work, the entire Bitcoin system could be taken down tomorrow and you have no recourse or value to what you have.

For a currency to be viable it needs stability and this is something bitcoin or any virtual currency does not have. Now that does not mean I think they will go away but in the end I see them becoming more of commodity than a currency.
 
You realize bitcoin is nearly 5 years old. Sure it could go away, but not likely.

Overstock.com doesn't keep the coin, they send it off to coinbase I think which pays them back in USD right away based on the exchange price.
 
Computer Ed said:
Look argue it any way you like but a CURRENCY needs a level of stability to be viable. When you go buy a loaf of bread your dollar is worth a dollar. While the price for the load might change over night the change is usually within a single percentage point or so. When the currency changes value over night by 300% or more there is no stabilization and the market collapses.

Bitcoin also has no guarantee backing it. Go out tomorrow and your dollar will still work, the entire Bitcoin system could be taken down tomorrow and you have no recourse or value to what you have.

For a currency to be viable it needs stability and this is something bitcoin or any virtual currency does not have. Now that does not mean I think they will go away but in the end I see them becoming more of commodity than a currency.
Click to expand...

This guarantee you talk about is fine and dandy, but doesn't actually guarantee people with goods will continue to accept them. People accept them because they have temporary faith in it, not because it has been ordained from on high.

When you have a government try and tell people what something is worth, that's like saying "you now value this item 3 times as much as you did yesterday".

Bitcoin's advantage is an organic price discovery process, largely devoid of such malinvestment or market distortions. The dollar currently enjoys the advantages that come with being established, but it lacks the future adaptability of of the protocol bitcoin enjoys.

You could light a cigar with a dollar, bitcoin will never be able to do that.
You could issue shares of stock for a transnational company on bitcoin, the dollar can't do that.
 
One thing these companies like coinbase are doing are basing the bitcoin cost off an average not the mt. gox price. So at any given time say if bitoins are going for 1k on mt. gox, coinbaise is typically priced at about 900-915.00. If the vendor so chooses he could transfer the bitcoin to mt.gox and make even more off the transaction. Either way if they are only accepting payment and cashing out most of their holdings immediately, price fluctuation doesn't matter that much.
 
Computer Ed said:
Look argue it any way you like but a CURRENCY needs a level of stability to be viable. When you go buy a loaf of bread your dollar is worth a dollar. While the price for the load might change over night the change is usually within a single percentage point or so. When the currency changes value over night by 300% or more there is no stabilization and the market collapses.

Bitcoin also has no guarantee backing it. Go out tomorrow and your dollar will still work, the entire Bitcoin system could be taken down tomorrow and you have no recourse or value to what you have.

For a currency to be viable it needs stability and this is something bitcoin or any virtual currency does not have. Now that does not mean I think they will go away but in the end I see them becoming more of commodity than a currency.
Click to expand...

Exactly, it's not viable as a currency. It's viable as a speculative item for libertarians, much like tulips. The things that would make it viable as a currency, would mean you can't get rich speculating off of it like the libertarians want.

Like most of these schemes a few people in it will win and everyone else is going to lose. It's for suckers.
 
acerbic said:
Exactly, it's not viable as a currency. It's viable as a speculative item for libertarians, much like tulips. The things that would make it viable as a currency, would mean you can't get rich speculating off of it like the libertarians want.

Like most of these schemes a few people in it will win and everyone else is going to lose. It's for suckers.
Click to expand...

I speculate on many currencies through Forex.

Bitcoin is just one more...

;)
 
acerbic said:
Exactly, it's not viable as a currency. It's viable as a speculative item for libertarians, much like tulips. The things that would make it viable as a currency, would mean you can't get rich speculating off of it like the libertarians want.

Like most of these schemes a few people in it will win and everyone else is going to lose. It's for suckers.
Click to expand...

I just bought 18 thousand dollar speakers in part with money I earned from bitcoin.
Bitcoin I bought in November, not 2009. Thats pretty late to the game.
 
acerbic said:
Exactly, it's not viable as a currency. It's viable as a speculative item for libertarians, much like tulips. The things that would make it viable as a currency, would mean you can't get rich speculating off of it like the libertarians want.

Like most of these schemes a few people in it will win and everyone else is going to lose. It's for suckers.
Click to expand...

Wow. You should really read up on FOREX before you go running your mouth about a currency being viable if "you can't getting rich off speculating it like the libertarians want. That's a very ignorant statement.
 
Computer Ed said:
Or how happy overstock would be if it fell by 75% tomorrow?
Click to expand...

Why would they even care at all? They cash out the moment the transaction completes, coinbase takes a cut and immediately pays cash to overstock...
 
You must log in or register to reply here.
Back
Top