After making Bitcoin purchases on its site possible less than two months ago, Overstock.com (O.co) announced on Tuesday that sales using the digital currency have already passed the $1 million mark. O.co and other well-known companies that accept Bitcoins are helping to move them to the mainstream as an accepted form of payment.
Salt Lake City-based Overstock.com, Inc. started in 1999 as an outlet for companies to liquidate excess inventory. It has enjoyed more than a 700-fold increase in revenue since it started, with $1.8 million in 1999, growing to $1.3 billion in 2013. The company has been publicly traded since 2002 and has expanded its offerings to include new items and cars. Over 4,300 customers have made online purchases on O.co using Bitcoins since January 9.
One of the criticisms of Bitcoin is that most of it was being hoarded by speculative investors hoping to cash out on huge profits from the currency’s volatility. A recent study from MIT Technology Review suggests that Bitcoin hoarding is not a problem anymore. In 2009, half of all new Bitcoins were held for the first year of ownership. In 2013, most Bitcoins are spent within the first 24 hours.
This trend will likely continue, given the prominent companies that, according to NASDAQ, currently accept Bitcoins as payment, are expected to accept them soon. Blogging site Wordpress has accepted Bitcoins as payment for its fee-based services like extra space, themes, removing advertising and redirecting for more than a year. Zynga (News - Alert) stated that it will accept them soon, while eBay is expected to follow suit. PayPal is strongly considering it.
In December, an individual purchased a Tesla Model S at Lamborghini Newport Beach in Costa Mesa, Calif. using Bitcoins. The amount of the purchase was not disclosed, but estimates place it at around $100,000.
In February, an apparent hacking attack resulted in the loss of $470 million in Bitcoins from Mt. Gox. As a result, the exchange halted trading and eventually filed for bankruptcy.
Although this incident would seem to have given the digital currency a black eye, O.co’s reaching the $1 million level in Bitcoin sales is one event that might make the damage short-lived. Since the online retailer now accepts Bitcoins, customers can buy more common items, thus moving the currency closer to the mainstream.
Edited by Cassandra Tucker
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