"This is historic. Digital currency will be an important part of the future and Overstock is excited to be the first major online shopping retailer to accept it," saidOverstock.com Chairman and CEO Patrick M. Byrne. "As one who believes in limited government, this attracts me because it is a form of money that no government mandarin can will it into existence."
Byrne noted that Bitcoin is the world's most widely used cryptocurrency. The Bitcoin peer-to-peer network is made up of thousands of computers run by individuals around the world and doesn't answer to a central authority. It is similar to gold in that its supply is constrained mathematically to up to 21 million units that will grow in a predictable manner.
"Bitcoin is well suited for online transactions. It has no transaction fees and works well for international customers. Providing this convenience for the cult-following Bitcoin customer is the smart thing to do," continues Byrne. "Other online companies will have to follow suit soon."
Overstock.com is partnering with Coinbase.com out of San Francisco, Calif., to process the payments and to handle the conversion of Bitcoin into U.S. dollars. Byrne says, "Coinbase has been a dream to work with on this project."
"We believe that Bitcoin is nearing a tipping point for broad consumer adoption, and we couldn't be more thrilled to be working with the team at Overstock.com to help make that a reality,' states Fred Ehrsam, co-founder of Coinbase.
There's certainly plenty of room to grow. According to observers, the total value of bitcoins at the close of 2013 was $10.8 billion. That compares to the total stock of U.S. dollar at $800 billion and the fact that there is about $4 trillion in global currency traded every day. For now, however, experts say bitcoins' best use is as a low-cost replacement for credit cards and other payment mechanisms, as there are virtually no costs involved with bitcoin transactions.