Overstock.com Plans For Bitcoin Payments In 2014
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
Bitcoin’s future as a “mainstream” payment system is uncertain, but CEO Byrne hopes to see it grow with a little help from Overstock
The digital currency Bitcoin could gain some serious ground within the next six months, as last week online discount retailer Overstock.com announced plans to adopt Bitcoin as a payment method by June. Should all go as planned, Overstock would be the most prominent retailer to offer Bitcoin to consumers as a payment option. Many investors and tech entrepreneurs argue this technology could serve as a cheaper payment system and could shake up the payment market currently dominated by Visa and MasterCard. However, while some work has been done to try to establish various Bitcoin services, this form of payment has not yet been widely accepted in the retail industry.
Since October, Overstock has been vocal about its plans to implement this form of payment, though plans were slightly delayed because the company was unsure about how, and even if, the payment system would operate within existing laws. This was before a November senate meeting when several officials claimed that digital currencies could operate within existing laws. Whether or not this means the currency will ever become mainstream has yet to be seen. Some believe its fluctuating value could alienate consumers looking to use the currency. Because there are only a small number of Bitcoins in circulation today (valuing nearly $8.8 billion), the currency is particularly volatile to outside influences. For instance, in late November, the value of a single Bitcoin reached $1,137. However, following limitations from Chinese authorities, the value dropped to $759.
Regardless of these fluctuations, however, Overstock CEO Patrick Byrne seems interested in implementing the currency because of the potential freedom it would offer from governmental authority. Unlike traditional government currency, Bitcoins are made available by a decentralized computer network that has been set to release a finite number of Bitcoins (only 21 million, currently.) Byrnes has been lauded as an outside thinker, and indeed, has been dreaming about starting his own currency for a while, Businessweek says. Bitcoin payments have been on Byrne’s mind for about two years, but even before that, he dreamt about creating his own gold-based currency. As Byrne says, “I’m an Austrian economist by background, and we’re the guys who like gold, but not for the reasons our Keynesian critics accuse us of. If you believe in limited government, you have to have something that no government mandarin can whisk into existence.” In this case, that “something” would be a form of currency.
Byrne says there is “some fraction, tiny now, of the population” that would be interested in using this new kind of payment system, though his decision doesn’t seem based entirely on meeting consumer demand. Rather, he also seems interested in the potential effect that putting Overstock’s name into the Bitcoin circuit could have on the digital currency and on the face of retail payment systems. The larger the Bitcoin system, the less volatility, and the more likely people would be willing to venture into this new realm of payments.
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