Overstock.com, the second-largest online retailer in the U.S., has begun accepting Bitcoin as payment for all purchases. “Bitcoin’s first full day on @overstock.com was a huge success: 840 orders, $130,000 in sales. Almost all new customers,” tweeted Overstock CEO Patrick Byrne.
Along the way, Overstock sidestepped the challenges surrounding Bitcoin acceptance, including price volatility, lack of accounting standards and the no FDIC insurance on Bitcoin bank accounts, by using a third-party payments provider, Coinbase, to convert Bitcoin payments to U.S. dollars at the point of transaction. That means that Overstock does not have to worry about how to price its products in Bitcoin, how to treat it on its books, or how to pay taxes on Bitcoin transactions.
“Coinbase pays Overstock in dollars,” Rob Hughes, Overstock senior vice president, finance and risk management, told AFP. “Overstock does not hold Bitcoin. Overstock isn’t subject to volatility or security risks on Bitcoin, as we do not hold Bitcoins. And there are no special tax implications for Overstock. Since we receive dollars we record our revenues—and our taxes—in dollars.”
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