Having Bitcoins worth x amount is one thing and all very well. But people with Bitcoins want to spend them and Overstock took the plunge and started to take the digital cryptocurrency at the start off the year. It’s remarkable to note then that in that time they’ve taken payments worth more than a million dollars.
Overstock teamed up with Coinbase to process the payments and convert it in to US dollars. Since then, Overstock is reported to have had circa 6300 orders totalling in excess of $1m and 60% of those customers are apparently new to the site. So it’s attracting new business.
Last month, eBay UK allowed the sale of Bitcoin and other digital currencies in a special classified category in a sign that eBay Inc. isn’t allergic to the development. PayPal boss David Marcus has also made positive noises about Bitcoin and others.
I think it’s a fair bet that before the year is out, we’ll see some sort of experiment at eBay/PayPal experimenting with accepting Bitcoin and maybe others as a mode of payment.
The main problem with Bitcoin is there is no customer protection. They do support a sort of escrow-like service with multiple signatures but if your wallet is stolen you have no recourse. If your purchase breaks within 30 days and the seller walks you have no recourse. If your trusted third party makes a mistake and signs the transaction you have no recourse. There is currently nothing notable that Bitcoin provides over traditional credit card payments other than you can send money to someone without an intermediary for free if you are willing to wait hours or days for the payment to arrive. And if you do want it to be instant then you need an intermediary like Coinbase which charges a fee (currently 1%).
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