Cars, furniture, toys and an at-home coronavirus test are among the weird goods and services people are buying with bitcoin.
In the past year, the value of Bitcoin has risen from less than $10,000 to more than $50,000. Square and IBM are using blockchain, the technology behind the currency, to design and improve digital payments methods.
But what can you actually buy with Bitcoin?
Turns out, a lot. But it’s not always so easy.
“Bitcoin is just not the most efficient currency yet,” said Henry Elder, the head of wealth management at Wave Financial, a digital assets firm in Los Angeles.
For example, one can purchase goods from Amazon with Bitcoin, using a third party service called Purse. The way Purse is supposed to work is this: A customer selects the items he or she wants to buy on Amazon, then copies the URLs and returns to Purse, which processes the transaction, using gift cards it’s acquired from people who want cryptocurrency.
Purse guarantees its customers a minimum discount of five percent off Amazon’s list prices and adds the option of negotiating to receive up to fifteen percent off. I tried getting a $42.99 pack of 20 black KN95 masks with money I put in a Bitcoin wallet, but when it came time to click “order,” the total price — with fees — was $47.47, and that was including the eight percent discount I proposed paying.
The whole thing felt a lot like ordering from Uber Eats, except that there wasn’t even a bag of cold food at the end. It definitely wasn’t like buying directly through Amazon with one click.
In 2014, Overstock became one of the first big e-sellers to accept direct Bitcoin payments. It subsequently went on to develop a number of businesses related to blockchain.
In an interview last week, the company’s chief executive, Jonathan Johnson, made plain that there isn’t an obvious overlap between the selling of closeout sofas and the rethinking of the world’s major currencies. Bitcoin isn’t a very big source of Overstock’s revenue.
During the first three quarters of 2020, the site had revenue of almost $2 billion, according to its earnings reports. An average of $30,000 to $50,000 a week came from cryptocurrency, said Mr. Johnson. “Our demographic skews hard towards women and Bitcoin purchasers tend to be men,” he said. “It’s a different customer segment.”
Mostly, it would seem, Bitcoin became a payment option because its ethos lined up with the libertarian leanings of both Mr. Johnson and Patrick Byrne, Overstock’s founder.
Records are maintained through a publicly available, digital ledger, known as a blockchain, managed by a volunteer army over numerous servers. It readjusts in real time as transactions take place between different holders of Bitcoin.