Overstock CEO reveals more details on Bitcoin payments

Patrick Byrne, CEO of online retail giant Overstock.com, revealed more details about its bitcoin acceptance on Friday, telling CoinDesk the timeline for accepting the digital currency.

The company has not yet selected a third-party payment system to process its bitcoin payments, but Byrne said that may be determined in two weeks. He added that it will not start accepting bitcoin payments immediately, but is expected to start accepting bitcoin payments in June or July next year.

Byrne said: "We may cooperate with third parties. There are already several third-party payment companies interested in our business. It seems that cooperating with third parties is better than developing it from scratch."

Byrne believes that cost is the main driving force behind their acceptance of Bitcoin. "We pay a 2% transaction fee to the credit card company, and the company's profit margin is 1%. Getting rid of the transaction fee and increasing the profit margin by 2 points is quite attractive."

Ideology is also the reason why he accepts Bitcoin. Byrne is a well-known liberal, and this use of Bitcoin to stab the US dollar once again emphasizes his "pro-liberal" stance.

Pro-liberal stance

Byrne said: "If it is an ideal society, we will return to the gold standard financial system, and the government cannot over-issue currency with a stroke of the pen. Now we are not going to return to the gold standard, but Bitcoin can inherit its advantages."

While the government cannot increase the number of bitcoins with the stroke of a pen, it can squeeze their value. The price of bitcoin has fluctuated wildly, rising from less than $100 in early August to a high of $1,147. Then, due to the Chinese government's statement, it fell by half from its peak.

Byrne shrugged off the comments: "Politics has a big influence on Bitcoin right now, but as it becomes more widely used, that influence will diminish and bureaucratic impulses will be tempered."

As a public company, Overstock.com's responsibility is to protect the interests of shareholders and control risks. Byrne has not set a specific goal for the profits from Bitcoin, but he made a rough estimate that he thinks 1% is entirely possible. Based on this ratio, according to the average daily sales in 2012, the sales using Bitcoin would reach $30,000 per day.

Overstock.com will become the first large U.S. retailer to venture into accepting Bitcoin. Regarding the prospects of Bitcoin in traditional industries, Jeremy Allaire, CEO of digital payment company Circle Internet Financial, said: "Generally speaking, large and medium-sized retailers, including online stores, are relatively conservative about new payment methods. For example, McDonald's only started accepting credit card payments 10 years ago."

Consider the Challenge

For a public company like Overstock.com, the biggest challenge is liquidation at the end of each day. How to calculate the value of Bitcoin without converting it into fiat currency?

The tax authorities have not yet decided how to tax this decentralized digital currency, which will block many businesses that are willing to accept Bitcoin payments. In a US Senate hearing in November, Jennifer Shasky Calvery, director of the Financial Enforcement Network (FinCEN), said she had communicated with the IRS.