Overstock.com surprised a few people late on Thursday when it moved forward with its plans to accept Bitcoin as a form of payment. The online retailer previously said in December it would adopt the cryptocurrency “within the next six months”, but has now begun accepting it already, completing 150 orders within the first hour.
In an interview with Wired.com, Overstock’s CEO Patrick Byrne said that the company accelerated its plans because it feared someone else would get in there first.
“I felt I had tipped my hand. I didn’t want someone else to beat us,” Byrne said to Wired.
Overstock first broke the news on Twitter:
— Overstock.com (@Overstock) January 9, 2014
It’s a huge milestone for Bitcoin of course, but Overstock stopped short of fully endorsing it – as Wired reported earlier, the company trades its Bitcoin into dollars as soon as payment is processed. Rather than keep hold of its Bitcoin booty, Overtsock is using the services of Coinbase to process its digital money. Coinbase processes each transaction at a predetermined exchange rate, converting the Bitcoin into dollars for the retail site. What this means is that Coinbase is managing and assuming all of the risk, though Overstock will certainly win plenty of kudos from the Bitcoin community.
Coinbase later posted the following message on its Blog:
“This marks the largest retail Bitcoin implementation to date. For the first time ever, customers can purchase a wide selection of goods with bitcoins — from electronics to home accessories — from a trusted, branded vendor. We’re excited to serve as Overstock.com’s official digital wallet to facilitate all related transactions on their site.”
Overstock’s caution is understandable, as Bitcoin’s been on a bit of a roller-coaster these last few months. Back in November one Bitcoin was worth around $200, then the Chinese got involved and this value shot up to over $1,000. This was followed by a sharp drop as China’s government tightened up its regulations, causing BTC to briefly slip to less than $500 – since then it’s bounced back somewhat, and is currently trading at around $825, according to Bitcoinaverage.com.
Admittedly the vast majority of Overstock’s customers will continue paying in fiat, but as a publicly traded company it has no choice but to be cautious of Bitcoin’s volatility, hence the partnership with Coinbase.
Even so, Overstock’s acceptance of Bitcoin is sure to boost confidence in the cryptocurrency. The company is by far and away the largest retailer to start accepting BTC, although it’s been accepted by smaller retailers and businesses for years already. A few big names have previously announced they’ll take BTC as payment, such as Virgin Galactic, which said in November people could use it to pay for space flights, and Chinese web giant Baidu, which began accepting BTC for cloud services in October, only to reverse that decision in December. A few well known websites, including Kim Dotcom’s Mega, Reddit, OKCupid and the Khan Academy also accept Bitcoin.