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Giant US Retailer to Accept Bitcoin
Overstock.com – the American internet retailer with over a billion dollars per year in sales – will accept Bitcoin starting in 2014.
As Overstock CEO Patrick Byrne told the Financial Times:
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.
If there’s going to be some part of the population which adopts it… I think that we’ll get that business. And the people who switch to it will respect that we started adopting it.
Europe has rolled out its first Bitcoin ATM. And a bitcoin ATM in Vancouver, Canada did $1 million dollars worth of transactions within the first 29 days.
Mobile gift card company Gyft – which allows users to purchase gift cards at more than 50,000 retail locations in the U.S., including Brookstone, Lowe’s, GAP, Sephora, Gamestop, American Eagle, Nike, Marriott, Burger King and Fandango – partnered with BitPay earlier this year to start accepting bitcoins within its app.
According to the Bank of England’s Chief of Financial Stability, this may be a big step towards breaking up the monopoly of the too big to fail banks.
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IRS.
While it's not technically legal, as tax is legally voluntary (http://youtu.be/XNICz9CZOgw), they will come get you & bring guns. If you resist payment you are imprisoned post-arrest. If you resist arrest you are shot, possibly killed.
The issue here is not tax avoidance. Of course one must pay taxes in USD for goods sold in exchange for cash, gold and bitcoin or they'll send in the hounds...
idiot.
The issue IS tax avoidance.
The purpose of the slave currency is the slave tax.
No tax = no slave currency.
Most of the issue lies with clearing. I personally don't see that costs covering this function/risk is properly acknowledged in use-cost. There's certainly a risk for vendors to clear through smaller-scale, less-proven clearing entities... sure, larger rewards for those taking larger risks and all, but...
overstock.com is a large company selling supposedly "overstock" items, you can get good deals there. They must have a higher profit margin to be able to accept this volatile currency.
No the merchant payment processor service that sits between them and the customer assumes the risk. As long as overstock gets their price paid in USD or whatever the medium used is inconsequential whether it be bitcoin or whatever coin. That is the merchant service's problem. As an online retailer you'd be stupid to not accept bitcoin or altcoins like litecoin if the merchant service middle man accepts the volatility risk of the crypto-currencies. That and the fact the transaction fees are lower than accepting debt/credit cards for online payments. Also btw whether it be bitcoin or litecoin or whatever coin overstock or any retailer in general doesn't have to use the middleman and most of the fees to accept them if they want to take on the volatility risks. Can't say the same for the SWIFT or VISA systems. Plus unlike SWIFT and VISA your banking information is given a layer of protection in the process plus if your wallet is for some reason compromised unlike SWIFT and VISA after it has been drained of funds someone can't run up bills on your bitcoin wallet. It provides an added layer of identity theft protection in that regard. There isn't a direct correlation between your bitcoin wallet and your bank account or debt/card.
There are lots of reasons to like crypto-currencies as a fungible digital cash equivalent to facilitate commerce from both a customer and vendor standpoint.
"No the merchant payment processor service that sits between them and the customer assumes the risk"
Would this risk require compensation? wouldn't this have to be accounted for somewhere, like through increased transaction fees?
Sure, perhaps paying 2.9% is better than paying out 3%, but this would hardly be any reason to feel victorious. Yes, I MAY be exaggeratibng here, but without any real numbers for what the markets will adjust to for assuming transaction risk (hell, it could even be MORE) this number is valid as any other.
"unlike SWIFT and VISA your banking information is given a layer of protection in the process plus if your wallet is for some reason compromised unlike SWIFT and VISA after it has been drained of funds someone can't run up bills on your bitcoin wallet."
I believe that all existing U.S.-based banks currently provide protection. Yes, this is AFTER any breach, but, on an individual level it's a little less of a problem: well, OK, going through all the headaches of trying to pick up after the damage can be a BIG pain... The real value would be for the processors themselves, in which case I could readily see those very entitties such as VISA taking up this business, wherein we're kind of back in a familiar situation...
"There are lots of reasons to like crypto-currencies as a fungible digital cash equivalent to facilitate commerce from both a customer and vendor standpoint."
In a high-tech world, yes.
It's likely they'll charge a wider spread plus the fees. At least that's how I'd do it if it were me.
So they may charge 2.9%, but that's on top of whatever rate you get. That's where their risk buffer would come from.
Also, during more volatile periods, they could widen their spreads further or offsetl their transactions at time of sale on an exchange somewhere.
ABSOLUTELY.
My big critique of btc as currency is the volatility for vendors (and for bag-holders, it's grid-down).
But the company can't operate without a grid anyhow so as you say, if someone else steps up to be a bag-holder to take all the volatility risk then by all means, take the cream and run with it.
Good for Overstock.
Besides, any payment processor in any currency can put up a bid/ask spread regardless of btc being involved if for whatever reason other fx ratios are rapidly moving out of whack. On enough dollars on enough purchases they add up so even a small move in say eur/usd or usd/cad would make VISA or Paypal adjust on the spot to lose nothing.
But don't you think with third party guarantors, the BTC ecosystem is going to have to start allowing derivatives including naked shorting to distribute risks? Then you start seeing back alley problems no different than shadow banking today.
Unfortunately, BTC brokers like Coinbase do this. I've said it time and time again, the last mile is always going to be the problem with virtual currencies. Plus, won't the third party guys want to KYC in case of a transaction SNAFU or even as Bona Fide to guarantee the transaction. We are already seeing features only available to "verified accounts" cropping up everywhere.
One other thought, who becomes the official exchange rate for the transaction from BTC -> USD or whatever. Sort of implies that the Bitcoin Foundation will have to act as a central bank no? Let's not even talk about the new "BitCoin Credit" shops being setup.
Derivatives already exist for BTC. You can't naked short since the blockchain is not anonymous yet for BTC. BTC and altcoins in general have properties as both a currency and commodity that be used to trade and hedge for volatility. They can be traded as currency swaps like USD/BTC BTC/LTC etc and because they are mined the ratio of the pricing of one to the other should have some known ratio based on the coins mined and coins that can be mined like the gold to silver ratio.... That FinCEN regulates the middle men as money transmitters will alleviate the more predatory stuff for commerce with the middle men. And feaures are just that features by companies looking for an edge. How the merchant services market plays out is still to be determined but FinCEN stepping into the fray has basically legitimized third party merchant services operatiing in the US and as such should lower resistance to bigger retailers from accepting crypto-currencies as a form of payment. The first merchant service than can successfully deal with the volatility issue is going to make a fortune since this is an emerging technology and service. Plenty of room for growth and it has real utility and value from a service standpoint.
Libertarians need to temper their idealism and take the what market is giving and work with that for now. Bitcoin isn't going to take out FED funny money but it can break the stranglehold on the payment transmission systems the TBTF and credit card companies basically have monopolized like SWIFT and VISA. Systems that the NSA has full unfettered access to. Right now the blockchain isn't 'anonymous' but it is more secure from a privacy standpoint than SWIFT or VISA is. And it is an evolving technology that is in the early stages.
There is no official exchange and the whole exchange setup is evolving anyways. How it plays out is yet to be determined. One of the things currently being worked on in some of these alt coins is the idea of a decentralized global exchange with no Central exchange and a payment transfer system built right into the currency itself. This is alot more than just 'coins'. The blockchain is the real innovation here it allows currency or a digital fungible equivalent to function as a service at the same time. It has a lot of other applications outside monetary uses.
Naked shorts in Bitcoins are impossible, because clearing happens p2p and within less than an hour. It's not like on Wall St where buyer and seller of a security have middle men in between and clearing takes many days, which allows a lot of shady pratices.
A blockchain could be also used to maintain the ownership changes of company shares. Then you could deliver shares p2p within an hour or less. And you don't need middle men for stock trading anymore. Current practices on the stock market are just a relic of the pre-internet age. It's time for the whole financial industry, not only for currencies, to adopt the blockchain.
"Libertarians need to temper their idealism and take the what market is giving and work with that for now. Bitcoin isn't going to take out FED funny money but it can break the stranglehold on the payment transmission systems the TBTF and credit card companies basically have monopolized like SWIFT and VISA. Systems that the NSA has full unfettered access to."
While I agree with the thoughts here I don't believe that crypto-currencies are going to be required to topple this pile of shit. BAD = FAIL. It's all going to fail anyway, so why load up on complications?
Maybe TPTB will adopt them so that they can "provide" our daily allotments... (though there's a whole hell of a lot of infrastructure yet needed in order to achieve scale; and then there's the trouble with the majority of the planet being w/o the required infrastructure)
To illustrate a point about the benefits of accepting things like bitcoins as a fungible digital cash equivalent and consumer fraud protection.
http://news.yahoo.com/target-stores-39-customers-hit-major-credit-card-0...
Target Corp said hackers have stolen data from up to 40 million credit and debit cards of shoppers who visited its stores during the first three weeks of the holiday season in the second-largest such breach reported by a U.S. retailer.
If Target had accepted bitcoin or whatevercoin. The only thing compromised is those wallet address not people's personal financial information. Think of how much less you have to spend for compliance and fraud prevention in general. If you are stupid enough to not have multiple wallets then tough shit. If you only have one wallet you use for shopping you know it is compromised if it gets hacked and you lose your coins that is it. You don't have to go through the dance with identity fraud that happens afterwards. If it doesn't get hacked and you don't want to use it anymore or are paranoid that some hackers know the wallet address is tied to you personally do the following. Create a new wallet and stop using the one that got exposed when the retailer was hacked. Sell the coins in the old wallet onto the market and buy the equivalent amount back into the new without creating an association between the addresses in the blockchain.
What IS "Overstock"? Is that a synonym for the entire US retailing sector or what...?
It's coming. No one trusts govts and banks anymore. Just wait until Europe starts with the bail ins.
There are only two classes left- those that have and those that don't. Bail-in will come from the "haves," who control the redirection of the money anyway... it'll all be like busy work, and meanwhile the ship/system sinks...
Zero Hedge readers know that the "upside down pyramid" he's referring to is likely:
(Click here for bigger image)
Bitcoin belongs at or near the top of the pyramid, along with all the other obscure derivatives, backed by little or nothing, even less than Mortgage Bonds, which are supposed to be backed by Real Estate somehow. It is as remote from real gold as any financial instrument could be.
Bitcoin could be considered a "Personal Credit Obligation," in the sense that it is only backed by some anonymous individual's promise to pay something in the future.
And gold is backed by what? Of course you can hammer it flat and wrap it around your sandwiches.
No no. Muni bonds are totally safe. They are usually triple AAA rated and are backed by the finest cities, states and municipalities. Safe as churches.
Gold 2.0!
There's only one kind of gold: the kind with an atomic nucleus.
guess what's bellow gold for the last 2 years... eheheheheehe, don't know why people are ignoring it...
Weed?
Smells more like hash, to be precise.
Oh yeah?! But you can't eat, er, a...
My elegant algorithm is bigger than yours~! And, we promise, only a limited supply.
And it begins once the first domino falls.....
Wake me up when they take Beanie Babies.
I like Overstock more than those slimeballs over at Amazon.
But they already have the $2,000 Amazon gift card for bitcoins:
http://www.gyft.com/merchants/amazon-com/
Its a trap....
http://freeyourselffrommicrosoftandthensa.org/2-uncategorised/44-december-2013-update-connecting-the-dots-between-microsoft-backdoors-nsa-corruption-and-the-bitcoin-ponzi-scheme
The bitcoin bashing gets crappier by the day. If the NSA has a backdoor to Bitcoin, why they are not using it?
a trap - goes deeper than I had wanted.
UEFI with remote bootstrapping & several motherboards shipped with NO CSM able to do MBR boot means serious root-kit hackability.
Makes you want to ensure your ethernet isn't plugged in when you actually boot up: no matter how small the code if there's any running you didn't want there pre-OS you could be compromised, even an open-source compiled OS like Linux.
You just don't know what that first code in memory is intended to do, like rewrite kernel functions on the fly for basic IO in memory so by the time they're executed they're for the NSA.
That was a link from a link within what you posted but I followed it.
Unlike the average bit-tard I have a Computer Science degree & Linux and I do understand this.
I stopped reading at 'homomorphic encryption algorithms' and examples and put it off to the side until later. (link to a link to a link). That's what I get for reading up on elliptic curves in cryptography.
It was educational, thanks. Never did any ellipticals by hand. Did do RSA by hand.
"Its a trap...."
I do not believe Bitcoin is a trap or a conspiracy of the government or some shadowy organization.
However, it is still very experimental and highly speculative. Unless you are an insider such as a miner with specialized software skills and major computing resources, putting money into it is highly risky.
you didn't read the article. i did. Looks like a trap to me but you'll need to recompile from source & ensure the RNG is not compromised.
I always liked PGP's RNG: you literally type at whatever speed you want & a combination of keys & time between keystrokes fed the RNG seed.
Thanks for the link... worthwhile to chase down the intel
You keep believing that. This is only 1.0 of crypto-currency you need to start somewhere any long term currency can't be based on SHA-256 and that is exactly what you are seeing with the alt coins.
No, you don't. No need to start with an intentionally corrrupted, agency controlled currency that feigns anonymity and security.
Who has the largest bitcoin wallet and how did they get it?
The blockchain is a work in progress as far as the anonymity goes. Bitcoin was a proof of concept that took off before all the problems could be worked out (which they are in the alt coins). Who directly or indirectly tends be the seed money for almost the major technical innovations of the last century and this one in some way shape or form? That is a weak argument, DOD (in general) money in some way shape or form is almost always involved in these things. By your logic we should shun the Integrated Circuit and everything that came from it because the DOD pumped money into it's creation even though they didn't do the actual R & D and create it.
"all the problems could be worked out (which they are in the alt coins)"
The alt coins are even more scamizdat than the original Bitcoin, as you would know if you read the Bitcoin discussion groups.
Several of the alt coins have already crashed and burned, and several more crashed but were revived and started over from scratch. Even the strongest Bitcoin proponents classify most of the alt coins as scams or poorly designed knock-offs. Some such as Junkcoin, Sexcoin, and Sh*tcoin, were purposefully designed as jokes. Most of the alt coin mining are clearly pump-and-dump, meaning that they mine the alt coins and immediately convert them to Bitcoin for themselves.
Messing around with the alt coins is really bottom-feeding. I set up the Feathercoin client myself, and found the software to be rather poorly designed with some serious bugs, and work-arounds that you can read about on the discussion groups, and Feathercoin is considered to be one of the more solid alts. Do you really want to commit money to this?
I admit nothing looks as hokey as seeing a page full of alt-coins with ever more ridiculous names. I can't write them all off however, because I have seen some interesting ones. I won't try to explain what name-coins are, but it seems like a clever idea. If I understand it correctly, they are using the bitcoin encryption to encrypt ownership of websites on the .bit websites.
If I had more skills I would invent an e-mail server that charged "postage" for e-mails sent. You would have to buy the coins just like stamps. The miners would be collecting the postage and encrypting the e-mails to thwart the pesky NSA. With the new SHA-256 mining rigs coming this spring you could do some serious encryption without too much electricity cost or hardware cost. Alas, this is way beyond my skill-set. I am more like a Steve Jobs visionary..... except I am still breathing. BTW, if any of you get this going, feel free to throw me a few butt-coins, douche-coins, or whatever you end up calling them.
Beginning Bitcoiner Bearing has been hard at work looking into Bitcoin. It looks legit to me, but I am a beginner. The math behind it is complex and apparently peer-reviewed (open-source). Open source guarantees nothing, but LOTS of smart people are looking at the whole Bitcoin Ecosystem.
I received my gold coin paid for with BTC, and found out how to buy them for cash locally. And provide step-by-step instructions for rank beginners (like I was less than a mont ago) to get a BTC wallet and Bitcoins themselves. And how to spend them!
"Fun With Bitcoin for Beginners: Part Five"
http://tinyurl.com/nu8v6zx
(My BTC articles do NOT need to be read in order)
DCRB--Welcome! I have been mining bitcoins for 2.5 years and am always surprised at how well it works considering the complexity. I just do it as a hobby so I try not to get too worked up about it like some posters here. If you have a decent graphics card (AMD brand) you might learn how to mine Litecoins just to see how it works. I don't know if mining Bitcoins will ever be profitable again, the difficulty is outrageous. There are some kinks in the system that I think may cause problems. I think 20 million BTCs may be too low of a final figure and the ever expanding block chain may be cause for concern. I also don't like the delay in transactions. All of these things can be overcome though. Many people here are concerned about the advantage of being an early adopter, but that doesn't bother me. I got in when Senator Schumer wanted them banned in May of 2011 and BTC was already well developed. It had gone from CPU mining to GPU mining and even though it wasn't "ground floor" I was able to mine dozens of BTCs per month. Even if someone "pre-mined" one million BTCs, I would just consider it an "inventor's reward" for getting the whole thing going. My point being, the system has been open to anyone since very early in the game. Possibly it is still early!
However, my long term prediction for BTC is complete collapse. I think the powers that be will fight it with everything they have because it has the potential to undo everything. Last time I went through customs and they quizzed me about how much cash I had I thought of BTC and chuckled. I don't like the powers that be, but I have great respect for their control and malevolence.
One last tip, you might play around with some very low difficulty alt-coins so you can learn how to transfer coins, sign messages and backup your wallet(!) That way if you screw up you aren't out much. Some examples: http://dustcoin.com/mining
Logic much?
I think you're blowing your cover.
I don't see you providing anything of substance except for a weblink selling paranoia and pimping my own e-books. You are the one pushing can't do regardless if there are some problems as opposed to can do and let's fix the problem. The real world works in shades of, not one or the other.
How many gigabytes is a Blockchain?
What is the growth rate of the Blockchain?
Is it an exponential growth?
Is the rate of growth of the data size of the Blockchain exceeding that of the rate of growth of Personal Computer Hard Drive Storage?
Will Bitcoin have to be Restructured and Centralized as a result of this structuaral inefficiency?
These are all rhetorical questions and the answer is affirmative to all of them.
Exponential Growth leads to exponential collapse. And with the continuation of Bitcoin as it is currently structured...that will be the fate of Bitcoin.
This reminds me of when we designed, and played, Interterminal Star Trek back in my College Days. The data usage crashed the mainframes and the administration was not too pleased with our hogging of the CPU time.
But it was fun navigating those Starships on a conceptual Cartesian Coordinate grid, attacking other players, and detonating them out of the Universe. There were no graphics at that time. The grids, and the ships, were in our minds. We used the Pythagorean Therom, in our heads, to calculate headings and plotted intercept courses. We had sensors that reported locations and courses of all other players. It was limited to eight players and that would crash the entire network system at times. There were five different types of ships with different capabilities. I chose a Federation Starship and named her the Waste. If you encountered my Starship you were wasted.
The administrators hated us with a passion.
I loved hacking in those days...before the internet. It was an internet, but limited to the Maricopa County Community College District with the server at the District Office. All of the Colleges were linked together.
Everytime anyone's ship moved, or fired a phaser, everybody's data set was erased and rewritten.
That is quite similar to the Blockchain which has recorded every transaction since the inception of Bitcoin. That is the most inherent weakness. It is unsustainable.
"How many gigabytes is a Blockchain?
What is the growth rate of the Blockchain?
Is it an exponential growth?"
And how exactly does knowing that help the clerk working at a grocery store in Ottumwa, Iowa or Anytown, USA? I'm sorry, but while I believe the governments monopoly over currency is immoral this whole BTC thing seems convoluted. If a person has to join a pool (see: collective) to mine the damned thing then something is wrong with it fundamentally. Sure, a person can go it alone but only if they have computing resources akin to the NSA's. Again, does Midge down at the Waffle House have that?
I agree with Tall Tom, it's unsustainable. Mostly because it's not understandable to the average Joe or Josephine. You know, the person who just wants to go the market and get a quart of milk or loaf of bread. Or in my case, a bottle of Glenlivet to numb my mind to the fact that all these years I've been buying AU and AG instead of BTC.
If every Tom Dick and Harry could jump in and mine gold what value would it have? Mining gold is a capital intensive endeavor. Corporations and equities are formed around the process...