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Overstock.com Plans To Accept Bitcoin

timothy posted about 8 months ago | from the totally-a-flash-in-the-pan dept.

The Almighty Buck 202

SonicSpike writes "Overstock plans to become the first big U.S. online retailer to accept Bitcoin, as Patrick Byrne, the company's libertarian chief executive, warms to the virtual currency as a refuge from government control. Mr Byrne told the Financial Times that Overstock planned to start accepting Bitcoin next year – possibly by the end of the second quarter – a decision that he said was driven mainly by his own political philosophy. 'I think a healthy monetary system at the end of the day isn't an upside down pyramid based on the whim of a government official, but is based on something that they can't control,' Mr Byrne said."

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Guesses as to end effect? (4, Interesting)

SuperKendall (25149) | about 8 months ago | (#45758431)

It will be really interesting if this creates any stability in the value of bitcoin, or if not how pricing will work with something that can fluctuate in value so wildly... will the company convert BTC to cash right away, or will it keep it for a while before conversion (if ever)?

Re:Guesses as to end effect? (1)

Anonymous Coward | about 8 months ago | (#45758523)

So if Amazon follows suit and starts accepting bitcoins, how will they collect/pay sales tax?

Re:Guesses as to end effect? (4, Informative)

Anonymous Coward | about 8 months ago | (#45758551)

Same way they do at the moment. All BTC conversions would be subject to a known conversion rate to USD and tax would be charged as appropriate, i.e. so long as AMZN feel it is in their best interests to do so.

Re:Guesses as to end effect? (4, Insightful)

xQx (5744) | about 8 months ago | (#45758849)

Parent should be modded up.

Also, what is this "plans to accept" BS. There are heaps of online retailers who take bitcoin, and if they were serious they would have just used someone like coinjar.io to do the merchant service for them and convert it back to USD on the fly.

Slashdot - stuff that matters.... It will be news when Overstock.com ACCEPT bitcoin, not when they do nothing more than release a press release that they PLAN TO ACCEPT bitcoin some day in the future.

Thanks Slashdot for your thinly veiled Christmas advertising. Anyone wanna buy some Viagra?

Re:Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45758893)

Also, what is this "plans to accept" BS.

It means that they plan to give you the option to pay for the things you buy there using bitcoins.

There are heaps of online retailers who take bitcoin, and if they were serious they would have just used someone like coinjar.io to do the merchant service for them and convert it back to USD on the fly.

And it is quite possible that they will indeed use such a service. After all, when they accept credit cards, it also doesn't mean they created their own credit card processing system, but they just use the existing American Express/Visa/whatever processors. And if they allow you to pay by bank transfer, they also let the banks handle the actual transfer.

Re:Guesses as to end effect? (3, Interesting)

serviscope_minor (664417) | about 8 months ago | (#45758987)

I think that a very large retailer like that one takes a while to integrate a new payment system. They might also wish to do the trading themselves to avoid paying the fees to the other operators.

But anyway it does show that that the profile of bitcoin is going up.

Re:Guesses as to end effect? (1)

supremebob (574732) | about 8 months ago | (#45759293)

Yeah... If Overstock.com really wanted to start taking Bitcoin right away, they could just use the Bitpay API and be done with it. I couldn't see setting that up taking more than a few days of development and QA testing.

It's actually a pretty good way of accepting Bitcoin, as the conversion to US dollars is done almost instantly.

Re:Guesses as to end effect? (4, Insightful)

rudy_wayne (414635) | about 8 months ago | (#45758547)

.

I think a healthy monetary system . . . . is based on something that they can't control

As fashionable as it is to be anti-government or anti-establishment, or Let's Stick It to "The Man", a monetary system not under government control is not the answer and Mr. Byrne is full of Libertarian bullshit. The recent article "Why I want Bitcoin to die in a fire" says it perfectly. Our current monetary system sucks, but replacing it with Bitcoin would be even worse.

Yesterday I went to a store and bought some items. Today I went back to that store and everything was still the same price, and the dollars in my wallet were still worth exactly the same as they were yesterday, and the day before, and the week before and the month before. An unstable currency that changes value from one minute to the next is an unworkable mess.

Re:Guesses as to end effect? (3)

soupbowl (1849394) | about 8 months ago | (#45758577)

Exactly. Bitcoin is to unstable to be worth looking at.

Re:Guesses as to end effect? (2)

MobSwatter (2884921) | about 8 months ago | (#45758597)

Dollars to sense, the U.S. dollar value is controlled, and not by a particularly trustworthy element. The answer is the gold standard.

Re:Guesses as to end effect? (4, Insightful)

mishehu (712452) | about 8 months ago | (#45758623)

Why yes, that's an even better idea. Let's all have the gov't hoard all sorts of gold that could actually be used for something useful instead... You'd love for your graphics card to triple in price because now the gold for the contacts and other components is all scarce now, wouldn't you? A gold standard has a big downfall in common with BTC... it's naturally deflationary. A modest rate of inflation is not necessarily a bad thing, but having to go from paying 1/4 of your net income on your mortgage now to 1/2 of your net income in 15 years doesn't sound so hot either does it?

Re:Guesses as to end effect? (1)

MobSwatter (2884921) | about 8 months ago | (#45758707)

Can't say the damage created by the amount of time being off the gold standard wouldn't be felt or hasn't already taken it's toll. It is just a stable and proven benchmark for money to keep things honest.

Re:Guesses as to end effect? (1)

meglon (1001833) | about 8 months ago | (#45758995)

Certainly, as long as you don't want economic growth. I suppose we can always resort to the guillotines like France did to weed out some of that over-population when it becomes another problem because of lack of economic growth too.

http://blogs.reuters.com/great-debate/2013/09/17/why-conservatives-spin-fairytales-about-the-gold-standard/ [reuters.com]

Re:Guesses as to end effect? (1)

Anonymous Coward | about 8 months ago | (#45759289)

I suppose we can always resort to the guillotines like France did to weed out some of that over-population

Oh please. We all know that we'll be getting our guillotines from China for half the price ... once they start taking Bitcoins again.

Re:Guesses as to end effect? (0, Insightful)

Anonymous Coward | about 8 months ago | (#45758733)

A gold standard can work better than the current fiat regime where nations are in over their heads in unpayable debt. In fact we should go to one just because it would force governments to curtail their reckless spending. The US has historically had a gold standard; Giulio M. Gallarotti wrote about the classical gold standard period (1870-1914) in The Anatomy of an International Monetary Regime:

Among that group of nations that eventually gravitated to gold standards in the latter third of the 19th century (i.e., the gold club), abnormal capital movements (i.e., hot money flows) were uncommon, competitive manipulation of exchange rates was rare, international trade showed record growth rates, balance-of-payments problems were few, capital mobility was high (as was mobility of factors and people), few nations that ever adopted gold standards ever suspended convertibility (and of those that did, the most important returned), exchange rates stayed within their respective gold points (i.e., were extremely stable), there were few policy conflicts among nations, speculation was stabilizing (i.e., investment behavior tended to bring currencies back to equilibrium after being displaced), adjustment was quick, liquidity was abundant, public and private confidence in the international monetary system remained high, nations experienced long-term price stability (predictability) at low levels of inflation, long-term trends in industrial production and income growth were favorable and unemployment remained fairly low.

Re:Guesses as to end effect? (2, Insightful)

Pentium100 (1240090) | about 8 months ago | (#45759039)

A modest rate of inflation is not necessarily a bad thing, but having to go from paying 1/4 of your net income on your mortgage now to 1/2 of your net income in 15 years doesn't sound so hot either does it?

You know what would be better? Being able to actually save money for years to buy something and no having the money lose value until I save enough of it.

Re:Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45759101)

A modest rate of inflation is not necessarily a bad thing, but having to go from paying 1/4 of your net income on your mortgage now to 1/2 of your net income in 15 years doesn't sound so hot either does it?

You know what would be better? Being able to actually save money for years to buy something and no having the money lose value until I save enough of it.

If your savings actually are losing value you are doing it wrong.

Re:Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45759321)

Gold is artificially scarce, do you think gold mines release everything they dig up? The miners control that market like a puppet, in the same way the maple syrup and oil markets are puppeted and many other resource commodities, all controlled via stock piling. If the product is not perishable it is more likely to be stock piled to gain market stability.

Re:Guesses as to end effect? (1)

Anonymous Coward | about 8 months ago | (#45758801)

you now of course that there a little problems with that too? Like Spain managed to get inflation with gold and silver too and not because they debased it back then. There is also another little problem with that. The amount of money in circulation is limited by amount of gold you have. As one of the users pointed out gold has some practical uses. using it for these few mazillion dollars that only US economy is worth is probably a little challenge you overlooked or? Besides the whole bad money replaces good money on the market story is taken as evil which is not always the case. I can imagine money nobody tinkers with, nobdy prints more except for used up coins etc. (which if you do everything electronically is not needed). You have goods that are worth this much in your economy. So you need appropriate amount of money to represent these goods. Then you have services that for simplicity we have fixed amount per unit of time - you need some amount of money to represent that too. Now imagine that oh unthinkable value of your goods change because your population got old and lazy and could not work this much anymore. Old goods lose value, goods like say good wine from abroad becomes more expensive suddenly - ever wondered why would that be? You see there is a problem with money - it was and always was a proxy not a real thing. Which means if food get scarce (because Monsanto fucked it up so much that the plague destroyed all the rice and potatoes and no patented goods we do not have - another interesting subject in our nice little world of monopolies and idiocy) - what do you think happens to the prices of food? You have inflation going on with your gold not debased gold coinage too....

You know what your real problem is? Your problem is that you try to fix complex problems with a single simple tool which is nice if it works but even if it does in some range of conditions it is never a solution that does it all. You are a geek and want to kill it with a new shiny tool or to use an old adage: silver bullet. I have news for you - it does not work.

Re:Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45759017)

No, he doesn't want to use a silver bullet. He wants to use a gold bullet.

Re:Guesses as to end effect? (3, Insightful)

Patch86 (1465427) | about 8 months ago | (#45758867)

Yeah, because the value of gold is totally stable:
http://www.bullionvault.com/gold-price-chart.do [bullionvault.com]

There's a reason why every country in the world abandoned gold/silver/commodity linked currencies, and it wasn't because of a global conspiracy- it was because they were a disaster.

Re:Guesses as to end effect? (1)

Mr0bvious (968303) | about 8 months ago | (#45759005)

Excuse me if I'm just showing my ignorance but can we really determine what is changing in those graphs? Is it the value of the currencies to which it is measured against that changes or the value of the gold? There has been some serious money printing going on world wide which may explain the steady rise since 2003. I would speculate that the significant bullish trend in gold is a symptom of currency not being backed by something akin to a gold standard - the effect of 'Quantitative Easing' and speculation of more QE. Its fall since 2011 can be attributed to the speculation that more QE is not likely.

If I was to chart gold against silver it will tell a different story than charting it against xx$ (xx = pick any major currency). If our currencies were backed by a gold standard would these graphs tell a different story yet again? I think it would.

Again, I'm no economist and I'm just taking guesses, but if cash was backed by gold would it not decrease the need to speculate and trade against gold and aid in its 'apparent' stabilisation since there would be no benefit of gold over cash?

As far as I can see the gold standard was dumped due mostly to governments being in so much debt that they could never honour their debt obligations with gold. Also, it's harder for a government to manipulate a currency backed by gold (less control).

I'm not convinced that the gold standard was a bad thing - it had its problems, but I think having a baseless currency is far worse and unsustainable.

There's a reason why every country in the world abandoned gold/silver/commodity linked currencies, and it wasn't because of a global conspiracy- it was because they were a disaster.

They were a disaster how? The inability to manipulate their currencies? I don't think there is any global conspiracy - but if you're going to trade with countries that do not use a proper standard (eg gold) then you're putting your self in serious disadvantage with regard to trade and currency manipulation. They basically had no choice once the US decided to do so.

Re:Guesses as to end effect? (0, Flamebait)

Anonymous Coward | about 8 months ago | (#45758691)

How can you say with a straight face that a dollar today buys what it will in a month? Are you completely ignorant of inflation? Or has your hatred of libertarians blinded you so that you cannot see it?

All those you say this to in real life believe you are a fool.

Re:Guesses as to end effect? (4, Informative)

Patch86 (1465427) | about 8 months ago | (#45758901)

The inflation rate in the US is what, 2% per year? 3%? 4? And when was the last time it suffered serious deflation? The difference in value between what I can buy in a shop today and what I can buy in a shop in one month is likely to be a fraction of a percentage point different.

Whereas Bitcoin has inflated by literally thousands of percentage points over the last year, has recently deflated by about 200% in the last MONTH, and regularly moves 10% or more on a DAILY basis. I have literally no idea whether a Bitcoin in my metaphorical pocket will buy me 10x more or 10x less goods by value next month compared to this month. Unless that situation changes, that is simply not a workable situation. As a sort of grand online casino game Bitcoin is great, but as a currency it is an unworkable disaster.

Re:Guesses as to end effect? (1)

AmiMoJo (196126) | about 8 months ago | (#45759041)

200% deflation? So it was worth $-1000? Maybe you added an extra zero?

Re: Guesses as to end effect? (1)

Patch86 (1465427) | about 8 months ago | (#45759211)

Compared to it's year start value. Apologies, not the most sensible way of expressing it- the dangers of unqualified percentages and all that.

You understand my point though. Massive value moves in either direction. Not stable. Etc.

Re:Guesses as to end effect? (2, Insightful)

Anonymous Coward | about 8 months ago | (#45758719)

you're a retard.
the dollar is stable because it's backed by trillions in averaging commerce and billions in liquidity. huge fucking numbers.
bitcoin appears unstable because it has not yet reached that scale.
it has nothing to do with the base currency, be it bitcoin, dollars, or pigs.

Re:Guesses as to end effect? (1, Interesting)

philip.paradis (2580427) | about 8 months ago | (#45758765)

I could spend some time explaining several things to you, mostly things involving international currency exchanges and market volatility concerns, but I suspect that my time would be wasted. Instead, I'll simply note that Overstock.com is not the only large entity considering dealing in BTC, and a lot of smaller companies already do (and in ways that might surprise you), probably more than you suspect. At the end of the day, an old expression applies here: "money talks, bullshit walks." You're standing in a pile of bullshit at the moment, but that's your right and I certainly won't waste any more of my time attempting to reason with you. Cheers.

Re:Guesses as to end effect? (1)

Spy Handler (822350) | about 8 months ago | (#45758885)

"Money talks, bullshit walks" is exactly right. We just differ on which we think is bullshit. Time will sort that out.

You go ahead and buy all the bitcoins you possibly can and hold on to it. I'll just keep my money in stocks and real estate. Come back in 2 years and let's see where we stand.

Re:Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45758963)

stocks

Are you trying to suggest that stocks are...stable?

Re:Guesses as to end effect? (1)

pspahn (1175617) | about 8 months ago | (#45759003)

They most certainly are... depending on where your option is.

Re:Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45758829)

> As fashionable as it is to be anti-government or anti-establishment, or Let's Stick It to "The Man", a monetary system not under government control is not the answer and Mr. Byrne is full of Libertarian bullshit.

Libertarians may be full of shit, but give them a little credit for discussing ideas instead of resorting to ad hominem...

People who dismiss anti-establishment ideas as "fashionable" or use other dismissive language are usually ok with the establishment. That is fine, you were lucky. People who are not ok with the establishment have their reasons too. This is the problem with democracy, the establishment has no empathy for the people who's lives are being made miserable by the "consensus". This is why limiting the government's intrusion (or the government-corporations complex) in our personal lives is a good idea. Nowadays a lot of people feel miserable because of lack of food of shelter, and many others feel miserable because of lack of meaning. But I guess you could call that a fashion.

Also, feeling dismissive towards anti-establishment ideas is usually cyclic with the mainstream, depending on which team is currently winning the reality show.

Re: Guesses as to end effect? (-1, Flamebait)

RyuuzakiTetsuya (195424) | about 8 months ago | (#45758985)

The problem with trying to explain economics to libertarians is that despite being shown they're wrong, they persist.

I find it more useful to call a libertarian a useless fucking moron rather than debate them. Until they have new ideas, at least the ad hominem is cathartic.

Simply put, libertarians aren't serious. They're ideological. American history is full of libertarianism in action and also libertarianism failing.

Re: Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45759169)

By today's standards all your ancestors were libertarians. By their standards you are, at best, a communist. They were using sound money that encouraged savings and investments. You are praising inflation that, with some help from outside, encourages borrowing and consumption. They were building the strongest country in the world. You have bankrupted it. Conclusion?

What today's libertarians are failing to understand, though, is that it is simply too late to act (note that naive != moron). Surveillance in the USA far exceeds one in the USSR, so does the government wealth to personal wealth ratio, or government military strength to personal defense means. Democracy is now an illusion maintained to keep you quiet - you are no longer allowed to alter any of the core policies of the party.

Merry Christmas.

Re: Guesses as to end effect? (2)

XcepticZP (1331217) | about 8 months ago | (#45759435)

Simply put, libertarians aren't serious. They're ideological.

We most certainly are serious, thank you very much. Not only that, but we pride ourselves on the consistent morals that back our ideology. We may not have the best solution in the world, but it most certainly is the only moral and workable solution to have a cooperative society. Meanwhile, statists like you find it perfectly reasonable to include theft, imprisonment, torture and kidnapping as part of your utilitarian ideology to solve problems. How about no thank you. I'll take my supposedly "failing libertarianism" over your "working" piece of shit state any day.

Re:Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45758923)

Currency is just a measure of wealth. It does not need to be controlled anymore than a metre or a kilogram is. You want to be able to distinguish US Dollar from Zimbabwe Dollar but that's about it.

Controlling currency has one big problem - you cannot trust anyone to do it. Not even USA, although we used to think they are trustworthy because of their position and the fact it was built on sound money.

Currently it just happens that Chinese government is subsidizing US Dollar so you do not see the inflation in imported products (you do see a massive inflation in markets isolated from other countries, so called "bubbles"). But take the sponsor away and the illusion of stability is over.

Re:Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45758949)

You don't even understand the concept of value. No, when you went to the store the next day, the value of USD had changed, in reference to other currencies(which is what I assume you mean). If you had gone to a store that was based on a different currency, then the conversion would have been different.

Re:Guesses as to end effect? (2)

physicsphairy (720718) | about 8 months ago | (#45758969)

The value of a dollar can and does fluctuate wildly (consult any market crash) and certainly alters slowly over time. What makes it "stable" is the heavy inertia it enjoys from being tied to so many aspects of a large economy, particularly goods whose value are themselves stable. This makes it stable on average, but your analogy wouldn't work if instead of going into a store and buying an apple you went to the stock market, and it doesn't work if a major part of what the dollar is exchanged for comes under duress, such as the real estate market or the American government.

Bitcoin is fluctuating in value right now precisely because people are betting on its future usefulness as a currency. It's sort of like you are buying stock in the Bitcoin Digital Currency company, but the currency itself is being immediately exchanged for the stock. How is it supposed to have a stable value when the only thing it's good for is making bets on an uncertain future? If I had 10 bit coins right now, I really wouldn't know what to do with them, except for look up what they are selling for and get some dollars in trade.

But the simple progression of the future is going to make its more intrinsic value obvious, and once it's tied to companies like Overstock, the value will start to derive increasingly from the goods you can buy with it.

Hasn't bitcoin been specifically designed to have an investor-centric mining phase before plateauing?

Re:Guesses as to end effect? (1)

Cornwallis (1188489) | about 8 months ago | (#45759113)

Oh good. Would you like my hyperinflationary Zimbabwe $10 trillion bill?

Re:Guesses as to end effect? (-1)

Anonymous Coward | about 8 months ago | (#45759119)

Government pig. Go scare your cunt of a mother.

Re: Guesses as to end effect? (1)

LF11 (18760) | about 8 months ago | (#45759577)

You clearly have never used bitcoins to buy real goods. As someone who does use bitcoins to buy groceries and household goods, the volatility is nowhere near the problem you think it is.

Go ahead, keep missing out. Today's millibitcoins will be tomorrow's microbitcoins.

Re:Guesses as to end effect? (1)

Anonymous Coward | about 8 months ago | (#45758581)

It will be really interesting if this creates any stability in the value of bitcoin, or if not how pricing will work with something that can fluctuate in value so wildly... will the company convert BTC to cash right away, or will it keep it for a while before conversion (if ever)?

Keeping it in BTC would be considered a particularly risky investment strategy unless there were some way to hedge against sudden changes in the value of BTC (I am aware of nobody that offers such a hedging instrument at this time). It would therefore open the directors of the company to being sued by the shareholders for violation of their fiduciary duty should a sudden collapse in the value of BTC occur (i.e. something like what happened the other day). So, no, I doubt they'll keep it for longer than is practically necessary. They'll keep a small reserve of BTC for everyday trading purposes (they'll have to be able to issue refunds, etc.), but otherwise it would all be converted to USD at the earliest practical moment (probably in batches in order to reduce market costs).

Re:Guesses as to end effect? (2)

Sqr(twg) (2126054) | about 8 months ago | (#45758675)

will the company convert BTC to cash right away, or will it keep it for a while before conversion (if ever)?

From TFA: "Mr Byrne said that if Bitcoin derivatives exist when Overstock starts to accept the currency it would "bank" Bitcoin and use them to hedge the risk of changes in its value. If such derivatives do not exist, he said Overstock would trade Bitcoin into dollars every day."

Bitcoin derivatives would require a major re-write of securities law. That's not going to happen. So he would have to sell the Bitcoin immediately,

So for those wondering what effect this will have on BTC exchange rate: It will create a selling pressure as people use stored BTC to buy from Ovestock, who immediately convert the BTC into USD.

Re:Guesses as to end effect? (1)

SuperKendall (25149) | about 8 months ago | (#45758769)

Interesting, honestly I did read the article before posting, but somehow I missed that part. I did see where he said there is no such protection today though...

Re:Guesses as to end effect? (0)

Anonymous Coward | about 8 months ago | (#45758919)

Bitcoin derivatives would require a major re-write of securities law.

Care to explain? You can buy/sell options not only on money and stock, but also on goods. Why would bitcoins be excluded?

Re:Guesses as to end effect? (1)

Joce640k (829181) | about 8 months ago | (#45759251)

It will be really interesting if this creates any stability in the value of bitcoin, or if not how pricing will work with something that can fluctuate in value so wildly... will the company convert BTC to cash right away, or will it keep it for a while before conversion (if ever)?

More like:
a) When Bitcoin is high they'll charge a percentage and convert them straight away.
b) When bitcoin is low they'll charge a percentage and use them speculatively, hoping to make extra money.

ie. The "libertarian owner" believes he has the bitcoin market figured out.

Plus it also generates a lot of publicity for Overstock, who I'd never heard of until Slashdot gave the a free plug.

Time to short OSTK (4, Funny)

Anonymous Coward | about 8 months ago | (#45758435)

Perfect timing! I'm always in need of new stock market ideas! Thanks Overstock.com...you made my day!

Re:Time to short OSTK (2, Interesting)

Trepidity (597) | about 8 months ago | (#45758503)

Maybe you're already referencing this, but shorting OSTK makes their CEO very angry [wikipedia.org] .

Re:Time to short OSTK (0)

Anonymous Coward | about 8 months ago | (#45758557)

Of course, his analysis of the end result of short trading is rather different to other peoples, and is somewhat contradicted by the fact that short trading was blamed for the sudden rise in the price of oil only a little while after he wrote that diatribe.

In the end: short trading introduces extra reasons to trade into the market. It therefore encourages greater fluidity. But every short-sold share has to be bought by somebody in the end, so it should (averaged over a long period of time) have no net influence on the value of the equity that is being sold.

Re:Time to short OSTK (0)

Anonymous Coward | about 8 months ago | (#45758569)

In the end: short trading introduces extra reasons to trade into the market. It therefore encourages greater fluidity. But every short-sold share has to be bought by somebody in the end, so it should (averaged over a long period of time) have no net influence on the value of the equity that is being sold.

No, but a concerted effort can help dry up a company's cash flows, and such stop in cash flows can take down even relatively healthy companies....

Re:Time to short OSTK (0)

Anonymous Coward | about 8 months ago | (#45759045)

In the end: short trading introduces extra reasons to trade into the market. It therefore encourages greater fluidity. But every short-sold share has to be bought by somebody in the end, so it should (averaged over a long period of time) have no net influence on the value of the equity that is being sold.

No, but a concerted effort can help dry up a company's cash flows, and such stop in cash flows can take down even relatively healthy companies....

Not really - if a company's stock price goes down that doesn't suck any money out of the company. It is third party investors who lose out, and even then they only lose out if they sell the shares into the artificial-created slump and don't wait it out (short selling is expensive so it is hard to do for more than a few months). The only way it affects the company would be if the company was planning to raise money by doing another issue of shares at precisely that time.

There is a slightly stronger case in relation to banks, because if you can make an artificial slump in the price of a bank's shares you might be able to affect general confidence in the bank and so cause a bank run, which will cause it to collapse. In early September 2008 Alex Salmon, the leader of the Scottish Nationalist Party, blamed the problems of the Scottish banks (RBS, Lloyds, HBOS etc) on 'London hedge funds' (the SNP think that everything bad in Scotland is somehow due to England). Of course it turned out that the quality problems at the banks were more than just rumours.

Re:Time to short OSTK (3, Interesting)

Trepidity (597) | about 8 months ago | (#45758585)

It's also weird to oppose it if you're a libertarian, as Byrne claims to be. A "naked short" is just a contract written against a stock. Why should the government interfere to prevent people from writing such contracts? Requiring that short sellers have the underlying security as "cover" is just a government regulation.

Re:Time to short OSTK (0)

Anonymous Coward | about 8 months ago | (#45759483)

Why should the government interfere to prevent people from writing such contracts? Requiring that short sellers have the underlying security as "cover" is just a government regulation.

Because there's a business model in which you write such contracts, and take the money if the gamble pays off; and if it doesn't pay off, you throw up your hands, say "sorry, I don't have that stock", and have your company declare bankruptcy to get out of paying your debt.

The pure libertarian position is that this business model is only made possible by bankruptcy law and the shield offered by limited-liability corporations: without such things, the cheated party would be free to extract payment from your worthless hide. But, assuming that we keep the concepts of bankruptcy and corporations, additional regulation is necessary to prevent this sort of cheating.

Re:Time to short OSTK (0)

Anonymous Coward | about 8 months ago | (#45758935)

Yeah, I'm also against naked short selling. I mean, the traders could at least wear pants when selling short. ;-)

Message to those who will complain in 2014: (0)

deego (587575) | about 8 months ago | (#45758485)

Message to those who will complain in 2014 about how bitcoin is "not fair" because they failed to buy today:

See the signs. Read the news. Understand the protocol. And, consider investing. And, if you don't buy now, then for heavens' sake, don't complain in 2014 about "unfairness" after the overstock thing happens. It's not others' fault that you don't buy in time. Rewards (may or may not) come to those who take the risk.

Re:Message to those who will complain in 2014: (0)

Anonymous Coward | about 8 months ago | (#45758689)

Gert fucked. I'm not "investing" in a POS ponzi scheme

Re:Message to those who will complain in 2014: (1)

Anonymous Coward | about 8 months ago | (#45759117)

Message to those who will complain in 2014 about how bitcoin is "not fair" because they failed to buy today:

See the signs. Read the news. Understand the protocol. And, consider investing. And, if you don't buy now, then for heavens' sake, don't complain in 2014 about "unfairness" after the overstock thing happens. It's not others' fault that you don't buy in time. Rewards (may or may not) come to those who take the risk.

I have read a lot of arguments against Bitcoin, but have never once coming across somebody complaining about it being unfair because they didn't get in early, before in your post now. There is nothing unfair about losing or earning money speculating in something as wildly unstable as Bitcoin, it is very similar to speculations in volatile stocks, just captures the interest of nerds more than the stock market usually do.

Re: Message to those who will complain in 2014: (1)

LF11 (18760) | about 8 months ago | (#45759585)

There are a lot of very bitter people complaining that they never thought it would get this big.

overstock.com? (1)

Trepidity (597) | about 8 months ago | (#45758487)

I think you mean "O.co" [overstock.com] .

Overstock.com still exists? (3, Insightful)

Anonymous Coward | about 8 months ago | (#45758497)

Overstock.com still exists?..... Oooooh I see what they did there.

This press release brought to you by O.co, just a few days before Christmas!

Upside-down pyramids (3, Insightful)

NoNonAlphaCharsHere (2201864) | about 8 months ago | (#45758505)

Yikes. What this guy knows about monetary policy and central banking is - staggering. While national backing-free fiat currency may not be the most desirable way to do things, multiple entities issuing highly volatile (think internet speeds) banknotes of dubious value (CPU cycles? really?) is an insane step in the wrong direction.

Re:Upside-down pyramids (1)

Greyfox (87712) | about 8 months ago | (#45758533)

Seems to me it just points to demand in that arena. If I were to take a wild guess (knowing very little about currency) I'd say people have fairly low faith in government-backed currencies and are looking to diversify. US treasury bonds are still the safe haven of choice for investors worldwide, and with Fox news and the US Government's own actions undermining confidence in that medium, investors are probably desperate for any place else to put their money. I'd guess like any other bubble, it'll pop eventually. The question is, when?

Re:Upside-down pyramids (1)

NoNonAlphaCharsHere (2201864) | about 8 months ago | (#45758559)

Well, the NASDAQ is at levels it hasn't been at since 2000, and gold is trading at a 3-year low, so if I thought that the bubble was about to pop, which I actually do, and the choice of which "currency" to trade dollars for, gold or bitcoins, I know which one I'd pick. #include <std-disclaimer.h>

Re:Upside-down pyramids (0)

Anonymous Coward | about 8 months ago | (#45758591)

Seems to me it just points to demand in that arena. If I were to take a wild guess (knowing very little about currency) I'd say people have fairly low faith in government-backed currencies and are looking to diversify. US treasury bonds are still the safe haven of choice for investors worldwide, and with Fox news and the US Government's own actions undermining confidence in that medium, investors are probably desperate for any place else to put their money. I'd guess like any other bubble, it'll pop eventually. The question is, when?

You can a spin a globe blindfolded and pick a random spot with a nearby currency that is more stable than bitcoin, your wild guess is scary.

You don't diversify into something wildly risky, you do it to minimize risk.

Treasury bonds are not on the same planet as bitcoin. Nobody is _desperate_ to move money into bitcoin. NOBODY.
Eager? Maybe, to each his own.

Re:Upside-down pyramids (0)

Anonymous Coward | about 8 months ago | (#45758619)

I'd guess like any other bubble, it'll pop eventually. The question is, when?

And more importantly, what will its value settle down as after it bursts? As only BTC 21M will ever be created, if anyone is using them for actual commerce they will retain some residual value. Their price at the moment is driven by the investment market, but I believe there is a nontrivial market for people who actually want to use them for commerce, and announcements like this will only serve to increase the value of that market. I'd say it is unlikely that the value of the system as a whole is $14B (which is what the current quotes for BTC/USD would value it at were all BTC currently issued), but maybe it will be worth $1-2B, which suggests a final end value of somewhere in the $50 to $100 range for a bitcoin is perhaps realistic.

Re:Upside-down pyramids (2, Insightful)

Anonymous Coward | about 8 months ago | (#45758595)

multiple entities issuing highly volatile (think internet speeds) banknotes of dubious value (CPU cycles? really?) is an insane step in the wrong direction

I don't think you entirely understand bitcoin, or where the value of a currency comes from. First of all, there is only one issuer of bitcoin: the bitcoin network, acting in aggregate, according to a pre-agreed algorithm. Secondly, the value of almost any modern day currency is entirely a perceptual value caused by the notion that people will accept that currency at some approximately-known rate for payment for goods or services. The only reason bitcoin is highly volatile at the moment is that not many people are using it as a currency -- it is still far more popular as an investment vehicle than for its actual intended purpose. Only when more mainstream retailers start accepting it will we see its value reach long-term stability.

Only Temporary (0)

Anonymous Coward | about 8 months ago | (#45758525)

This will be shut down in no time. Governments will not tolerate flouting of their control over commerce.

Nice publicity stunt, but almost certainly no real effect.

But how much will it cost? (4, Insightful)

Animats (122034) | about 8 months ago | (#45758573)

But will it be cheaper or more expensive than using a credit card?

Accepting Bitcoins is surprisingly expensive. There's a volatility risk, and for a currency that can change by 10% in minutes, that's a real problem. Coinbase (which is a dealer, rather than an exchange) has a posted buying price, good for one minute, and some shopping cart systems use that. But that price is usually lower than the prices on the major exchanges; there's a conversion cost. So, as with retail money-changers, you pay a conversion fee. Also, like most money-changers, Coinbase will briefly stop buying during periods of high volatility or if they have trouble unloading their Bitcoins.

Then, of course, there's prying the money out of the Bitcoin broker or exchange. Overstock is probably in a strong enough position to demand a daily sweep into a real bank account, with serious penalties for failure to deliver.

If you look at the few Bitcoin-accepting businesses that sell real products with typical mail order retail markups, the Bitcoin price is usually significantly higher than the US$ price. Most of the stores that currently accept Bitcoin are selling T-shirts, posters, remaindered goods, and similar crap. [spendbitcoins.com] Of course, that's what Overstock does, so it may be a good fit.

Re:But how much will it cost? (4, Insightful)

rudy_wayne (414635) | about 8 months ago | (#45758611)

But will it be cheaper or more expensive than using a credit card?

Accepting Bitcoins is surprisingly expensive. There's a volatility risk, and for a currency that can change by 10% in minutes, that's a real problem. Coinbase (which is a dealer, rather than an exchange) has a posted buying price, good for one minute, and some shopping cart systems use that. But that price is usually lower than the prices on the major exchanges; there's a conversion cost. So, as with retail money-changers, you pay a conversion fee. Also, like most money-changers, Coinbase will briefly stop buying during periods of high volatility or if they have trouble unloading their Bitcoins.

And there's the problem. Bitcoins aren't real money. Before you can spend them you have to convert them into something (dollars, euros, whatever). Meanwhile, the paper in my wallet doesn't need any conversion.

Re:But how much will it cost? (1)

Anonymous Coward | about 8 months ago | (#45758795)

The paper in your wallet doesn't flow as easily over the internet though...

Re:But how much will it cost? (0)

Anonymous Coward | about 8 months ago | (#45758945)

last time I checked my credit card was accepted at millions more places than bitcoins. Bank transfers and paypal are also available and seem to come with far lower fees than that imposed by bitcoin exchanges and traders.

Re:But how much will it cost? (0)

Anonymous Coward | about 8 months ago | (#45759341)

last time I checked my credit card was accepted at millions more places than bitcoins.

Your credit card is made of paper?

Re:But how much will it cost? (2)

blackraven14250 (902843) | about 8 months ago | (#45758797)

I'm not sold on the idea of Bitcoin, but that's not exactly a solid argument against Bitcoin over the long term. You'd have trouble converting any currency into goods before the currency became widely accepted. There's a lag time for adoption with any attempt at a currency, even ones mandated by law, so it's no surprise that a currency that's essentially discovered and adopted by word of mouth takes a long time to be truly useful in all situations.

Re:But how much will it cost? (1)

Bert64 (520050) | about 8 months ago | (#45758843)

Meanwhile, the paper in my wallet doesn't need any conversion

Assuming you are trying to spend it in retailers which accept that particular type of currency... Try spending it in a foreign country and you'll have to convert it. Bitcoin is no different, some retailers will accept it and some will not.

Re:But how much will it cost? (1)

meglon (1001833) | about 8 months ago | (#45759011)

Actually, i use my US DOLLAR based credit card fairly often with a couple UK POUND based businesses, and their carts do the exchange for me. Why? Because US DOLLARS and UK POUNDS have the backing of their countries, as opposed to bitcoin which has the backing of.... what... rabid anti-government idiots, and financially questionable con men looking for the next score?

I'll take society over criminal wanna-be's any day of the week.

Re:But how much will it cost? (0)

Anonymous Coward | about 8 months ago | (#45759461)

You're an idiot. Posting AC as I don't have time to explain to you how what you just said makes you an actual idiot. Not only that, but you'll plug your ears and go "LA LA LA" because you can't handle the truth.

Re:But how much will it cost? (1)

SuricouRaven (1897204) | about 8 months ago | (#45758879)

It'll become real money when enough people start accepting it for goods.

Though if that happened, it'd also become a tax-evasion, embargo-busting, money-laundering criminals' dream. Government would have no option but to intervene and regulate, putting everything right back where it started.

Re:But how much will it cost? (0)

Anonymous Coward | about 8 months ago | (#45758911)

At least they can't print it so easily, and if they choose to spend money in Bitcoins it will be more transparent to the public than other means. It looks like a small change, but by chipping away power from the government like this we will eventually see a whole different world.

Re:But how much will it cost? (1)

ihtoit (3393327) | about 8 months ago | (#45759111)

the Government doesn't control the currency or the money supply, THE BANKS DO!

Re:But how much will it cost? (1)

Anonymous Coward | about 8 months ago | (#45759025)

Interestingly, a friend who runs a business that accepts BTC using BitPay has elected to keep some of the revenue in BitCoin... and convert some to his local currency. He gets the extra customers, can still pay his local accounts, and for part of his revenue has almost no transaction or conversion costs, and the probable up side of increasing valuation in the BTC he holds.

This strategy leaves him in control of how much exposure he has to the speed of the growing acceptance of BitCoin .. but lets him be seen as an early mover.

The main point is that doing this does not mean an either/or choice has to be made... and that means he can gradually accept a transition to a more stable global monetary paradigm (BitCoin), but use his retention percentage as a risk management technique. He gets to choose how much risk he takes with BitCoin, but also gets the extra business by being an early adopter.

Re:But how much will it cost? (0)

Anonymous Coward | about 8 months ago | (#45759245)

If vendors accept Bitcoins, consumers don't need to convert them to anything before spending them...

Re:But how much will it cost? (1)

satuon (1822492) | about 8 months ago | (#45758717)

Even if it is more expensive, it doesn't matter, because if you're holding Bitcoins, you need to convert them anyway, so you'll be hit with the conversion cost no matter what.

Re:But how much will it cost? (0)

Anonymous Coward | about 8 months ago | (#45758731)

it wont be any cheaper, because to get in or out of any exchange (or downstream exchange equivalent such as bitpay) costs the vendor just as much as the swipe does.
but it's massively more cool, so there's the win.
the bitcoin price is higher because they presume early miners are their customers, it's called rape. the market will sort that out and prices will fall. then it's just implementation cost.

Re:But how much will it cost? (0)

Anonymous Coward | about 8 months ago | (#45758741)

another advantage is you're saying FUCK YOU, to the old credit power broker industry and bringing in the new digital currencies.
you also have no idea how much vendors want to get out from under the thumb of credit contractual obligations.
and pci dss credit card number computer security shit.
you can't steal someone's source address and use it in romania. duhr.

Re:But how much will it cost? (0)

Anonymous Coward | about 8 months ago | (#45758799)

The conversions costs (1%) are usually much lower than the swipe (3% or more), plus no risk of chargebacks.

Re:But how much will it cost? (1)

AmiMoJo (196126) | about 8 months ago | (#45759031)

I guess he is looking at the longer term view that bitcoin will become a more useful currency that doesn't need exchanging so much. More interesting to me is that overstock sell hardware for mining BTC, so there must be a point at where using it to mine would be cheaper than selling it.

Re:But how much will it cost? (0)

Anonymous Coward | about 8 months ago | (#45759121)

The scare-mongering. If I were you, grandpa, I wouldn't use the computer or the Internet. You might get INFECTED by one of those crazy viruses. How did you get on slashdot? Do you work for the government that you are spreading your foul propaganda against bitcoin? Perhaps you should go to a site where they love corrupt governments and where they hate technology and freedom. Now go off, grandpa, and suck the state's tit like a good little boy.

Damn now I have to buy from Overstock (0)

future assassin (639396) | about 8 months ago | (#45758635)

not because of the Bit Coins but beacause of the risk they are taking and thinking outside of the box. I love when companies think outside of the box and against the grain. Now only if politicians took the same stance.

Re: Damn now I have to buy from Overstock (0)

Anonymous Coward | about 8 months ago | (#45758721)

Don't worry about it. Making an outrageous statement for a bit of free publicity just before Christmas is a very old and well known technique, and quite safely inside the box.

Re:Damn now I have to buy from Overstock (1)

SuricouRaven (1897204) | about 8 months ago | (#45758895)

I don't want polticians to think outside the box. I want them to settle down and focus on actually keeping their countries running smoothly, rather than constantly trying to rebuild society to their own ideals. As soon as one set of reforms is finished, power changes hands and a new regime is announced to undo the reforms and impose new ones.

A bit off topic (0)

Anonymous Coward | about 8 months ago | (#45758729)

Apologies in advance as I don't know much about the specifics of how currencies work. From what I can read, the unwillingness of widespread adoption of bitcoin and other crypto-currencies is conversion fluctuation. I would assume another reason is that governments would never allow a currency that they had no control over get to a point of popularity that could threaten the official currency. However in a hypothetical situation, could Bitcoin achieve stability if the use of it got to a point where individuals and companies could use them in the day to day lives/operation without the need to convert them to official currencies or at least rarely?

Re:A bit off topic (2)

SuricouRaven (1897204) | about 8 months ago | (#45758909)

Yes, in theory. But even long term it's high risk, because in the event it did grow to that level of popularity it would likely become subject to strict government regulation or outright prohibition. It wouldn't be stable in the same way as other currencies though - it's intentionally deflationary in nature, which has some serious economic implications. Good for savers, but it'd make obtaining credit near-impossible. Credit, though it can be a source of disaster when overused, is also essential for economic growth. If it did somehow take over, it wouldn't be an economic panacea. It'd just eliminate current problems and bring in new ones.

Re:A bit off topic (0)

Anonymous Coward | about 8 months ago | (#45758971)

Thanks SuricouRaven. From the sounds of it cryptoCurrrencies are not a perfect alternative for current currencies but if enough Bitcoins were kept in circulation, could it be possible to use it as a local currency like The Wörgl Experiment in Austria in the thirties?

http://www.lietaer.com/2010/03/the-worgl-experiment/

Re:A bit off topic (0)

Anonymous Coward | about 8 months ago | (#45758999)

It would never displace traditional money. Anyway, if you want an inflationary crypto currency, you can get that, too. [wikipedia.org]

The Slashdot of the past... (0)

Anonymous Coward | about 8 months ago | (#45758823)

The Slashdot of 1997-2002 would have loved Bitcoin. The Slashdot of 2013 hates it for some reason. I wonder what changed?

Re:The Slashdot of the past... (4, Insightful)

DogDude (805747) | about 8 months ago | (#45759395)

The Slashdot of 1997-2002 would have loved Bitcoin. The Slashdot of 2013 hates it for some reason. I wonder what changed?

That's easy. Most of the Slashdot crowd has grown up.

IRS to Overstock: (0)

Anonymous Coward | about 8 months ago | (#45758953)

please come in for an audit.

The poeple versus the mob (0)

Anonymous Coward | about 8 months ago | (#45759073)

If it is not controlled by the government (the people) it will be controlled by the mob.

the WORST thing for a healthy economy (1)

ihtoit (3393327) | about 8 months ago | (#45759103)

...is a monetary system under private control. Take the commercial banking sector. The banks are on a roll here, they're "losing" money hand over fist, and world Governments are rolling over to ensure they don't fail. Who are the winners here? With the exception of Iceland, it ain't the Governments. In fact, the banks tried to fool the Icelandic Government into the belief that if a bank failed then so does the economy, the bankers were jailed and the banks sacked. The Icelandic Government is now in charge of the money supply, and as it stands now Iceland has the LOWEST deficit in all of Europe.

Another publicity stunt... (1)

psymastr (684406) | about 8 months ago | (#45759343)

If you have a company and some money to burn (for coding the bitcoin business logic which will net you no profit), hurry and declare that you will be accepting bitcoins... The publicity stunt will get you on every news website and this will raise your non-bitcoin business, the only one that matters that is.

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