Last week, Let's Talk Bitcoins’ Stephanie Murphy spoke with Overstock.com's CEO, Patrick Byrne, giving us a unique glimpse into why and how a billion dollar company makes the decision to accept an alternative currency like bitcoin.
Bitcoin first made its way onto Byrne's radar about two years ago. He began following its successes and was intrigued by the idea of a detached, decentralized currency, but because of possible regulatory issues was quite apprehensive to consider it as a payment option for Overstock.
Byrne believes the government is unsustainably experimenting with monetary creation through quantitative easing programs that are leaving our money unsound and it will have negative consequences. He feels bitcoins represent sound money because it’s autonomous, decentralized, based on mathematical algorithm and outside of the control of central bankers. The potential of what could happen in unsound money practices was on full display during last year’s European financial crisis that left many Cypriots with empty bank accounts. He was struck by the number of resourceful business owners who converted their remaining money into bitcoins and were able to continue working and living relatively unaffected by the crisis. This is the moment he began to consider bitcoins as a viable payment option.
With its real world success in Cyprus and apparent soft approval from the Senate this past November, Byrne began actively seeking ways to incorporate bitcoins into the Overstock business plan. What initially started as a vague comment about Overstocks interest to pursue bitcoin at some unspecified future date spread like wild fire in social media. The overwhelming response opened their eyes to the much greater interest in bitcoins and alternative currencies beyond Overstock acceptance of them.
What was to be addressed in third or fourth quarter of 2014 and take six months to carry out actually manifested within a few weeks of the social media flurry and took eight days to implement. They are delighted with the new sales from individuals who have never used Overstock and maybe never would have if not for bitcoins, delighted to the tune of about $126,000 during their first day of acceptance. Though just a drop in the billion dollar bucket, they hope to find the sweet spot that allows Overstock to operate 10-20% of their business in bitcoins.
It’s all very exciting right now, but bitcoin has a way to go before it seeps into the mainstream consumers psyche enough to become a means of common exchange. Byrne admits at this point they are forced to convert their coins to dollars to pay their vendors, employees and operating expenses. Though as the dollar begins to inflate, he is confident they will begin requesting payments and wages in bitcoin.
Overstock.com has most likely pushed the alternative currency issue further than many large retailers would like but according to Byrne it's about supporting freedom while remaining relevant and cutting edge. His hope is that history will show Overstock.com was brave enough to think outside of the box and they were handsomely rewarded with your business.
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