Based in Salt Lake City, Overstock.com surprised retailers and Bitcoin enthusiasts alike when they began accepting Bitcoin for payment on January 9th, roughly five months ahead of their initially stated schedule. Now it seems that their hard work has paid off, as Overstock has now surpassed $1 million in Bitcoin sales, said CEO Patrick Byrne in an interview.
While the $1 million pales in comparison to the $1.3 billion of revenue the company brings in, Byrne has also said that instead of converting the bitcoins to dollars, the company is now keeping 10% of its Bitcoin in storage. When asked why Overstock stores a fraction of its bitcoin, he said it could possibly be used to pay vendors or employees. This, of course, is praised by many Bitcoiners as proof that the company is willing to put faith in the crypto-currency, and not just its user's enthusiasm for spending.
Initially, Overstock.com had projected $5 million in Bitcoin sales for this year, but the company has had to revise its prediction to $10 million, doubling the first estimate.
Byrne also shared that Bitcoin customers are typically men, spending $230 on average as opposed to the $150 average by non-Bitcoin customers. So far 4,300 customers have paid using Bitcoin, with an estimated 60% of them being new to Overstock. Apparently the most popular items purchased by Bitcoiners are sheets, cell phone cases, socks, and computer accessories.
The companies stock (OSTK) rose nearly 10% today, outperforming the market.
Byrne's comments were cheered by Bitcoiners, now moving forward after Mt. Gox filing bankruptcy and admitting the loss of 740,000 BTC, in addition to both Poloniex and Flexcoin being hacked. When asked about the trouble plaguing Bitcoin, Byrne said, "Banks get robbed and no one says that something must be wrong with the dollar."
A Man On a Mission
Patrick Byrne is known to be an advocate of limited government and has stated that he supports Bitcoin; as it is in his interest "to see a robust parallel monetary institution." Of course, saving 2% in processing fees on every transaction is a benefit that a shrewd business man like Patrick Byrne can't ignore.
Byrne started Overstock by buying the inventories of failed dot-com businesses and reselling the items below wholesale prices. In his time as Overstock's CEO, Byrne has lead a campaign against "naked short-selling," where traders can essentially bet on a security's price falling without ever obtaining the security. Byrne feels that the practice encourages corruption in the market, and in 2005, he famously claimed on a conference call that there was a conspiracy headed by a "Sith Lord" to drive Overstock's share price below $10. Under pressure from Byrne and others, the SEC banned what it called "abusive naked short-selling" in 2008.
Considering Byrne's opposition to shorting securities without ever having access to those securities, it is easy to see why the commodity aspects of Bitcoin would be attractive to him. Bitcoin has the potential to provide the ease of using credit cards on the internet, without encouraging a credit-based system.
Amazon's last statement regarding Bitcoin was that it had no interest in accepting cryptocurrency, citing a lack of customer interest.