Bitcoin prices remain between $800 and $900 today as major online retailer Overstock.com, Inc. (NASDAQ:OSTK) begins accepting them as a form of payment. According to The Telegraph, the company is the first major online retailer to take the digital currency for payment on its website.
Overstock.com starts taking bitcoin today
It was announced recently that Overstock.com, Inc. (NASDAQ:OSTK) would start accepting bitcoin in January, and today is the official day. The online retailer sells a wide variety of items in many different categories, like bedding, furniture, electronics and even cars.
To accept the digital currency, the company is partnering with U.S.-based bitcoin exchange and digital wallet Coinbase, which will handle the payment processing and also the conversions from bitcoin into U.S. dollars.
Bitcoins not officially accepted—yet
As with reports that someone had bought a Tesla Motors Inc (NASDAQ:TSLA) Model S recently using bitcoin, the fact that Overstock.com accepts them doesn’t technically mean that items are being purchased with bitcoin. Through the partnership with Coinbase, the bitcoin payment is accepted and processed by Coinbase and then exchanged for U.S. dollars, which then go to Overstock.com as payment.
Before every payment, Coinbase sets the exchange rate for bitcoin based on the current going rate. The exchange then converts the buyer’s digital currency right into dollars and transfers those dollars to Overstock.com.
Coinbase taking on tisk?
The value of bitcoin has been fluctuating wildly for quite some time, and some have suggested that Coinbase may be undercut under this deal. However, the digital wallet believes the risk is minimized through the use of software which is constantly monitoring fluctuations in the price of bitcoin.
Of course whether bitcoin will become a legitimate currency or payment processing system remains to be seen. Investors who are interested in the digital currency are watching the markets carefully as just the slightest bit of news—either good or bad—could be interpreted as a huge threat to this yet unproven currency.