Huge retail move to accept Virtual currencies

March 26, 2014 12:29 UTC

Since late 2013, Bitcoin has rarely been off the World’s Front Pages, it seems that everyone has an opinion and many of them are far from positive. The bankruptcy of Mt gox in Tokyo, which may, or as it turns out, may not, have lost up to $400 Million. The Silk Road arrests, and charges leveled that bitcoins were allegedly being used for secret trades in articles such as drugs and weapons. Even throughout the dark days of opinion pieces, citing imminent disaster and collapse, published by, previously unheard of, economists and journalists; there have been significant positives. During the period that Newsweek was achieving nothing more than worldwide media embarrassment, trying to out Satoshi Nakamoto, there has been an underlying trend towards progress.

Today, it becoming apparent that an ever-increasing number of retailers are beginning to accept bitcoins. The currency directory SpendBitcoins lists 7,824 different businesses that will accept bitcoins worldwide, 4,511 in the US alone. Coinmap.org lists a further 3,400, and helpfully provides a map to bring customers and retailers closer together. One of the larger retailers, the US-based retailer Overstock.com has been accepting bitcoins since January and today, Late March, has accepted bitcoin s with a fiat value of over $1 Million in sales by selling to almost three-and-a-half thousand customers. onathan Johnson, the executive vice-chairman of Overstock.com, is quoted as saying:

We figured in the first year we would have $3m-$5m in Bitcoin transactions, but now we think it is going to be closer to $10m-$15m. Most of these customers are new to Overstock and are spending about twice as much as our regular customers. I can’t think of a bad thing about it.

Gyft, the US based digital gift card platform that claims to be “The easiest way to redeem, send, manage and buy gift cards.” began accepting bitcoin payments in May last year and has seen the volume of sales grow five fold since that time, they are now at a level where they are processing over one thousand Bitcoin transactions on a “good day”. Vinnie Lyngham, the CEO of Gyft, states that:

Credit-card companies charge three percent just to handle a simple payment. Bitcoin is worth it just from a cost savings point of view

There is also, the not insignificant, problem that credit card providers can reverse transactions due to suspected, or declared, fraud. This costs between 0.2% to 1% of all transactions. bitcoin transactions are final and don’t get chargebacks. Gyft, like many retailers, has decided to use Bitpay, to shield from fluctuations, and they also cash out daily in order to avoid any potential losses in the event of the another online exchange collapse. Overstock follows the same policies, using Coinbase.

Bitcoin is growing in use, almost exponentially. The two dangers we must prepare to face, going forward, are transaction speed and the potential for a large-scale hack attack on the actual source code.  As more and more people in retail, and consumers are moving to use the cryptocurrency the transaction speed may well slow. If the transaction speed continues to slow to the point that precludes retailers from cashing out within a reasonable period of time then we may have a problem Finally, should the bitcoin security protocol be hacked, we are in trouble. Hackers have been trying this for years. As crypto continues to grow perhaps, we should just sit back and enjoy the ride. Let us trust in retail, let us trust the markets and let us trust in Crypto.

*Featured photo by Krista White (SEARS does not have anything to do with this story).

Last modified: March 26, 2014 19:33 UTC

Show comments