Bitcoin Just Scored Its First Major US Retailer

Bitcoin’s had a rough week after banking officials essentially kicked it out of China, but the crypto-movement just scored a major consolation prize. Overstock.com has announced that the company is preparing to accept the virtual currency as payment.

And it’s a huge score. While not quite Amazon level, the online retailer did $1.1 billion worth of business in 2012. Frankly, it’s the first US business to join the Bitcoin party that isn’t a gimmick. I haven’t yet had a chance to book a flight to space courtesy of Richard Branson, but I’ve certainly ordered a few sets of 800-count bed sheets for cheap. And a duvet that I still use. It’s super soft.

The one caveat however is, like Amazon’s drone announcement, this one comes a tad early. You won’t be able to refurnish your home with that BTC stash until late 2014. A team of six to 12 employees are developing the necessary platforms and accounting systems to support digital payments, according to CEO Patrick Byrne, who admitted the project was still in its early stages.

“I’ve come to understand bitcoin better and decided it’s something we do want to be associated with,” Byrne told MarketWatch, who added that he does not hold bitcoin. “It would just be another payment option, but beyond that I don’t know the technical details of how we would store it and such.”

Like most Bitcoin early adopters who aren’t just out to make a quick buck, Byrne’s reasons are purely ideological, and the self-described libertarian isn’t shy to share his anti-establishment perspectives. “Money is too important to leave in the hands of government officials,” said Byrne, who subscribes to the Austrian school of economic thought, considered by critics to be “heterodox” to mainstream theory. “The virtue of a gold standard is that government officials cannot just create new money at the stroke of a pen. That’s the attraction of bitcoin,” he added.

Indeed, Byrne has long been vociferous in his prophecies of America’s demise and pointed criticisms of the government’s role. “I do think that we are in—I have been saying for about two years we’re looking at a 1929 kind of event,” he told Fox News back in 2007. “I think that we are really in trouble in this country. And what you have seen in the last four months is just the beginning of it.”

Sort of bleak, no? Fox News guest host Terry Keenan, channeling Doge, could only respond with “wow.”

“The government has been keeping the economy afloat with flooding us with cheap money,” he continued. “And those days are over. The dollar is cracking. Eventually, they are either going to they have to defend it by raising interest rates or something. But we’re looking at a very bad economic situation.”

While his forecast of a financial crisis was on point, his predictions of economic armageddon haven’t come to pass, at least not yet. It’s this sort of worldview that may have prompted him to wage a controversial “holy war” against naked short selling, where market speculators sell shares of a stock they don’t own or haven’t borrowed, which is illegal but hard to prove in practice.

As one Byrne commentator observed after the controversial interview, it’s kind of his thing, noting that the Overstock chief “tirelessly champions causes that draw few followers: the ‘jihad’ against naked short selling, the private-school voucher initiative in Utah, the deep-discounting at Overstock that leads to losses year after year.”

Such determinism can also pay off. Under Byrne’s stewardship, Overstock finally turned a profit in 2009, and looks more or less in good financial shape, growing revenues by 4 percent between 2011 and 2012.

And it should be said that none of this is an attack on the man’s character or business acumen, which he clearly possesses in spades. He’s also impressively credentialed, earning a Bachelor’s from Dartmouth, a Master’s from Cambridge as a Marshall Scholar, and a Ph.D. from Stanford. The dude is no joke.

But it’s worth pointing out that Byrne and Bitcoin are a perfect fit, which is to say that Overstock’s plans to accept bitcoins is a philosophical and political decision rather than a technological or financial one. It’s unlikely that other companies will take Byrne’s lead, unless their executives have similar ideologies, or Overstock sales suddenly go through the roof once the company is Bitcoin-ready next year.

This is still Bitcoin’s biggest problem. People use it to make a statement, not because it’s actually beneficial.

Admittedly, that statement is getting louder, in part fueled by the country’s ongoing economic woes, bogged down by lingering unemployment and growing inequality. But the chorus against central banking authorities could lose some steam. For one, fears of runaway inflation have yet to materialize and on Wednesday, Federal Reserve Chairman Ben Bernanke commenced a policy of “tapering,” which simply means that the central bank will begin easing off its unprecedented monetary policy known as quantitative easing as the US continues its economic recovery.

Bitcoin is bouncing back, too. After the crash on Wednesday, the price has recovered to a respectable $740, a sign of the digital currency’s unquestionable resiliency. The majority of demand is once again originating in the US, where maturing regulations will lend cryptocurrencies further credibility. Then there’s the irreverent Dogecoin, which is still fucking unstoppable. It’s now the 10th most popular altcoin with a market cap of over $10 million, up from just over a million when we first covered it earlier in the week. Much grow.

All of which creates the sense that Bitcoin and its many clones are for real, even if we aren’t quite sure what to do with them. Its ideological underpinnings could also prove enough, at least for the short term. After all, nearly a quarter of Americans lean libertarian, and they will soon be able to pick up those to-die-for antique Versailles curtain rods with a currency that shows just how anti-government they really are. For the rest of us, it’s entertaining enough just to sit back and watch the show. And maybe acquire some Dogecoins. You know, just in case.

@sfnuop