
Overstock.com Is Now Accepting Bitcoins - ironchief
http://www.wired.com/business/2014/01/overstock-bitcoin-live/
======
JohnTHaller
Overstock.com uses Coinbase and Coinbase handles the entire checkout process.
It's really no different than checkout with PayPal. Except that it's never in
bitcoin at all. Overstock never shows a bitcoin amount due, it's handled
entirely at Coinbase's end. And no bitcoins are ever given to Overstock.com,
they just get USD from Coinbase directly and the customer is charged the
amount in bitcoins that convert to the amount of USD that their order is.

It's a win win for Overstock.com, really, since they don't need to worry about
the volatility and instability of bitcoin and only deal in USD but get to look
forward-thinking by accepting bitcoin. Yes, they are accepting more risk
because Coinbase.com could disappear overnight (FAR more likely than PayPal or
Visa disappearing overnight), but they get some advantage for their risk.

~~~
GigabyteCoin
This is still great news in terms of Bitcoin adoption, however. I can now
spend my Bitcoin on more things than I could before this announcement.

The more merchants that follow suit, the better.

Eventually there may be no need for Coinbase if a majority of merchants
accepted Bitcoin.

~~~
JohnTHaller
Except for the whole "you have no recourse as a consumer since there are no
chargebacks" thing. And no, the better business bureau, ratings websites, etc
don't count.

~~~
woah
you've only had this kind of recourse for the past 50 years. before that, for
5-10,000 years, money in all its forms worked just like bitcoin.

~~~
dragonwriter
> you've only had this kind of recourse for the past 50 years. before that,
> for 5-10,000 years, money in all its forms worked just like bitcoin.

To the extent its true (and, actually, money in most of its other historical
forms doesn't work much like bitcoin, but yes there wasn't a widely used
convenient equivalent to modern payment dispute resolution systems before
credit cards), like computers and modern dentistry and all kinds of other
modern developments, its not one of those things I'd like to give up having to
go back to the way things used to work.

~~~
stevedekorte
Can we safely assume you never use physical cash because it doesn't support
"charge backs"?

Also, what do you say to the populations of the ~40 countries that credit
cards don't work in _because_ charge back requests are too common there? Do
you tell them to simply never make online purchases?

------
csmeder
Is there a tax guide that would explain the consequences of me using some of
the bitcoin I bought in 2013 to buy an item on overstock this month?

As I understand it I would have to record the value I paid for the bitcoin in
2013, calculate the value it appreciated between when I bought it and the
amount I am using to buy the item. And then report this as capital gains on my
2014 tax return?

This sucks, this makes using bitcoin a lot more work than just paying with a
credit card. Plus, it might mean having to hire an accountant instead of just
using turbo tax?

~~~
mapt
I offer no actual reply, only a thought experiment, keeping in mind that the
USD is another floating currency that fluctuates in value:

...

" Is there a tax guide that would explain the consequences of me using some of
the US Dollars I traded for in 2013 to buy an item on overstock this month?

As I understand it I would have to record the value I paid for the US Dollars
in 2013, calculate the value it appreciated between when I bought it and the
amount I am using to buy the item. And then report this as capital gains on my
2014 tax return?

This sucks, this makes using US Dollars a lot more work than just paying with
a credit card. Plus, it might mean having to hire an accountant instead of
just using turbo tax? "

~~~
natrius
Except there are many statutes that give the dollar special tax treatment.

~~~
scoofy
This. People keep thinking that bitcoin is a currency. It's not. It's best
thought of as a commodity, in the same way that all foreign currencies are
essentially commodities, and using them to pay for things is bartering and
capital gains laws apply.

~~~
bunderbunder
Sort of. The US tax code provides some special provisions[1] that are meant to
make life easier for people making smaller transactions in foreign currency.
IANAL, but if I had to hazard a wild guess, for the purposes of the statute in
question "foreign currency" is defined as the official currency of a sovereign
nation that is not the USA. With BTC not being controlled by any country that
would imply that for the purposes of tax law it is just another commodity -
but something like the Euro is not.

[1]: See section (e) at
[http://www.law.cornell.edu/uscode/text/26/988](http://www.law.cornell.edu/uscode/text/26/988)

~~~
mapt
Would this change if a small, minimally developed sovereign nation adopted
Bitcoin as its official currency, as opposed to the US Dollar or the Euro or a
local currency that is not capable of earning much seigniorage per year?

~~~
politician
Just like how Sealand's hosting of the Pirate Bay made copyright infringement
globally palatable? No, probably not.

But thanks for reminding me of the word seigniorage, I'd been looking for it
actually.

------
pat2man
I just bought a watch using their bitcoin checkout. Since I was already logged
in to Coinbase it a single screen to approve the payment. Then back to a page
saying my order was complete. Couldn't be easier.

This is a win for bitcoin but its a huge win for Coinbase. Their payment flow
works well and I am sure Overstock accepting it will make it an easier sell
for other merchants.

~~~
nhaehnle
Here's a potential scenario as some food for thought:

Apparently, the process was so simple for you because both you (the buyer) and
Overstock (the seller) operate via Coinbase. Clearly, the process would have
been less smooth if you had had to use your own wallet.

Now suppose that for this reason, Coinbase (as a placeholder for any service
like it) manages to establish itself as the go-to payment provider via BTC.

Then, one day, they decide that since they always have to convert back to USD
for the merchant, maybe it would be interesting to allow their customers to
just keep a USD balance with them. It reduces their exchange rate risk, and
they could pass some of the savings on to you, making this a tempting offer.

Suddenly, BTC is not in the loop any more, though in the end all parties would
still be better off (lower fees than in the current credit card system).

Such scenarios are why I'm doubtful that BTC will "take over the world" in the
sense that many proponents think. I doubt it will become a predominant means
of payment in any industrial nation, and there won't be a Bitcoin-standard
(analogous to a gold standard) either.

Let me explicitly clarify: That does _not_ mean that I believe BTC's value
will necessarily drop to zero within the next 100 years. It might, but it
might not.

~~~
jff
That's why I always have to laugh when I hear about such-and-such a company
"now accepting bitcoin!". They don't get bitcoin, they get USD, so they don't
care. Want to buy something from Overstock? Take your USD, buy some bitcoin,
put it into your Coinbase account, Coinbase sends USD to Overstock. It's like
buying an Amazon giftcard for yourself--just an extraneous step between your
original USD and the USD that go to the merchant's account.

~~~
steveklabnik
Astute observers will note that this is very similar to the credit card
situation: Overstock does not accept USD, they accept Visa. (and MasterCard.
etc.)

If I go to Europe and buy something with my Visa debit card, my account is
denominated in USD, but they do some forex and the merchant gets Euro.

If I go to Overstock and buy something with my Coinbase wallte, my account is
denominated in BTC, but they do some trading and the merchant gets USD.

~~~
jff
Overstock might as well say "We now accept Coinbase!"

~~~
gigq
Except you can use any bitcoin wallet so they accept bitcoin not coinbase. As
absurd as it sounds when snapCard (a site that orders from other sites for
you) first started they would only work with Coinbase. Enough customers
complained that they had to offer a second option to accept bitcoin payments
from anywhere.

------
blhack
The importance of this news cannot be overstated. Overstock.com is the first
"main stream" company (my mom shops there) that accepts bitcoin that I can
think of.

Wow. Good job, overstock.com team for getting this done so quickly!

~~~
eli
I guess I just don't see it. To my cynical eye, it seems mostly like an easy
way for Overstock to generate a bunch of positive press and perhaps make a few
extra sales from bitcoin boosters.

Sure, it's a nice milestone for bitcoin, but the importance seems, well, kinda
overstated. I mean, a decade ago a bunch of big ecommerce sites took Flooz
too, right?

But hey, I thought the iPod was too expensive and Twitter was useless when
they launched, so what do I know.

~~~
thekaleb
I was listening to a podcast where the hosts claim that the CEO is a
libertarian and loves the idea of BTC as opposed to Federal Reserve Notes. But
in addition, it does give them press coverage as well.

~~~
ihsw
This is mentioned in the article:

> Like so many others, he believes bitcoin can free the world from the control
> of big banks and big government. “It helps us fight the machine,” he says.

I cringed reading this, mostly because _normal_ people don't feel quite
comfortable with sentiment like "fighting the machine."

~~~
waterlesscloud
You might be surprised at what _normal_ people actually think.

Get outside and talk to some folks. Very few are friends of "the machine."

------
ddrager
Just ordered a mini-helicopter on Overstock using Bitcoins. The checkout
process was flawless. I used the Bitcoin client on my phone to send the amount
by snapping a shot of the QR code on the website. Went right through, hit
confirm, and the deal was done!

Couldn't have been an easier process and can't wait to get my helicopter.

------
neals
As a European, I have never heard of Overstock. Though they actually do ship
here and prices can be displayed in Euro's.

How big is this site? What is their angle? Are they just like a smaller
amazon.com? Overstock sounds a little like lower priced articles from left
over stocks or something...

~~~
selectout
While I know Alexa is far from accurate, it does show overstock.com to be the
621 largest universal site and 160th in the USA. That should show you scale.

In 2010 (Fiscal Year) they has $1.1 billion in revenue with 1600 employees.
They are publicly traded with a market cap just under $750 million.

~~~
neals
That is actually many times bigger than I would have guessed. That they're
accepting Bitcoin is pretty huge for the Bitcoin movement then.

------
ftwinnovations
We recently began accepting it on our typing education websites
[http://www.Typing.com](http://www.Typing.com) and
[http://www.NitroType.com](http://www.NitroType.com), though to an
unfortunately meager response. Hopefully between Zynga and Overstock Bitcoin
begins to be accepted as a true medium of exchange.

The initial reaction was simply confusion and a lot of "what the heck is
bitcoin??? is it paypal??", so the rollout really was more of a educational
session than anything else.

~~~
dispense
Users of Bitcoin are likely to be proficient keyboard users. People that
aren't proficient keyboard users are not likely to be users of Bitcoin.

~~~
ftwinnovations
Well no, basically our audience is mostly made up of kids in school. That's
the main problem.

~~~
CodeCube
But you see, it's not a problem at all ... at least, in the grand scheme of
things. Every person that sees bitcoin in that checkout screen is going to
say, "what the heck is bitcoin?"

Then the next time they hear about bitcoin (like say, on the hit TV show
Almost Human
[http://www.youtube.com/watch?v=k8LqlMzEe-I](http://www.youtube.com/watch?v=k8LqlMzEe-I)),
they'll say, "oh, I've heard of that before, I wonder what it's about". And so
on and so on. You're doing a service :)

~~~
ftwinnovations
Ah yes, agreed. I meant purely related to the previous comment implying that
keyboard literate users are the only audience for bitcoins. And so I meant
that my uses are not knowledge about bitcoin regardless of their keyboarding
skills, being that they are for the most part quite young.

But I'm definitely pleased to be educating millions of children about bitcoin.
Actually it's all I expected when we began accepting it, but that is my way of
showing my support. Just doing my part!

------
james33
How much volume are they actually going to get though? I'm excited to see more
outlets accepting bitcoin, but to this point it still feels more like a
marketing gimmick.

~~~
kolev
They are not accepting Bitcoin. Coinbase is selling your bitcoins and giving
the dollars to them.

~~~
james33
Right, which from the consumer perspective is accepting bitcoins. There's no
need to be a smart ass.

~~~
kolev
Not really. The price isn't in BTC.

~~~
pantaril
But they are accepting payments in bitcoins.

~~~
kolev
You don't get it, do you? One of the rules in e-commerce is to limit the path
to the "submit order" button and remove any decisioning in the checkout
process - otherwise you may lose the sale. Given Bitcoin rate greatly varies,
if it Bitcoin is dropping, I won't buy as then I will have to spend more
coins. If it's on the rise, I will wait more to spend less. In general, too
much wondering to get the best deal. If price is in BTC and I own BTC, I buy
when I need something without having to worry about it. Anyway, they don't
accept Bitcoin as they: a) don't have a Bitcoin wallet; b) they don't have
stable prices in BTC.

~~~
kolev
@james33 I very well know what they did and how they did it. My point was
pretty clear though. Consumers don't use Bitcoin yet and won't - if any
consumer is interested in Bitcoin, it's to make money by hoarding, not to
spend it.

~~~
james33
The is the exact point I was making when I said it is just a marketing gimmick
to get PR.

~~~
kolev
Ok. Peace!

------
selectout
I'm impressed they followed through with this so quickly. Great to see the
adoption starting to flow in places that non crypto nerds and tech enthusiasts
visit.

------
cadab
So I wonder if anyone from the US could let me know, i'm from the UK and just
tried to make a purchase it bitcoin, but I only get the option for CC, debit
cards and paypal, no bitcoin.

So is this US only?

------
jrockway
So does anyone sell FX forwards (etc.) on Bitcoin yet? It seems everything now
prices their items in, say, USD, and then calculates the Bitcoin price at
purchase time. This makes the economy very unstable as the prices are never
consistent. If Bitcoin prices were stable, then people would start accepting
salary in Bitcoins, leading to even more stability, and so on. Or is Bitcoin
too young for that?

~~~
w-ll
The Internet Archive pays some of its employees in Bitcoin.

------
MattyRad
It's refreshing that now I can spend my bitcoin on things I want! They got it
working much faster than expected. Does anybody have any idea how returns
would work? Do they just send the original amount of bitcoin to the payer's
wallet? Or are returns even possible at this point in time?

~~~
andrewmunsell
From their site:

"Returns and refunds on orders purchased with Bitcoins are eligible only for
in-store credit, except in the case of cancelled or unfulfilled orders.
Bitcoins can only be used for orders shipped to the United States."

~~~
MattyRad
Cool. Thanks!

------
sshillo
This is pretty huge. I'd be interested to know what overstock's strategy is
for converting bitcoins back to fiat. I also wonder if there will be any tax
implications here for purchases made in countries such as Norway that don't
consider bitcoin real currency.

~~~
beaner
Bitcoin is automatically exchanged to USD for them by coinbase at the time of
the transaction.

------
kyleblarson
Could be interesting that they can tie physical shipping addresses to specific
wallets.

~~~
VMG
*addresses

which are free and disposable

------
nwh
Wish people would stop using the term "bitcoins" as if they're singular metal
entities, it seems to be where the perception that they are "too expensive"
comes from.

Bitcoin. Divisible to 8 decimal places.

~~~
chaz
Isn't the same as accepting dollars? Or Euros? Or pesos? Plural seems right to
me.

~~~
scarecrowbob
I think it's a pedantic point, as I believe that language is as language
does.... however, there's no reason why it couldn't be like "gold", which is
also highly divisible. You need the "s" plural for things that can't be
divided (like dollar bills). Thus, we don't get paid in "golds".

That said, semantically, coins aren't usually thought of as divisible things
in a modern context-- they are pluralized, so bitcoin will probably be
pluralized in the same way.

~~~
nwh
That's my thinking. Bitcoin is an outlier because "coin" is usually
indivisible, where as "bitcoin" certainly is. You're never likely to see a
price of more than one anyway, making the plural almost completely redundant.

------
timedoctor
Great for publicity value. Not that useful for their business in any other
respect (at the moment). This is a great time for ecommerce sites to start
accepting Bitcoin to leverage it for publicity.

------
dcc1
US only, ffs there are countries outside the US

------
hairama
Seems like these companies are rushing into this without fully understanding
how the technology works or where it's going.

~~~
d0ugie
And taking such risks impulsively yields big rewards, from time to time.

~~~
wdewind
Overstock isn't taking a risk here: they are getting the same exact USD they
got before.

~~~
toast0
They're probably getting more USD than they got before, because the merchant
fees are lower.

~~~
wdewind
Coinbase charges 1%. At overstock's volume they are probably getting a similar
deal on CCs, although definitely not quite 1%.

