Overstock’s “Grand Bitcoin Experiment” Goes Live
If Bitcoin truly does cement its position as a digital, P2P currency, then January 9th 2014 will be remembered as one of those quintessential milestones in the history of the coin. Why? Because mega-online retailer Overstock.com began accepting Bitcoins as a form of payment. Overstock is one of the world’s largest online retailers with revenues in excess of 1 billion dollars and a market cap of some 700 million dollars.
Under the current set-up, Overstock will not hold Bitcoins but instead immediately converts them into dollars. This may suggest that the online retailer may not fully believe in Bitcoin, and some suggest that this may ultimately be a publicity stunt. Either way, it does add credibility to Bitcoin. Within the first hour of the new Bitcoin program, Overstock processed at least 150 orders.
In China, Alibaba Bans Bitcoins
Overstock.com may be accepting Bitcoins, but that doesn’t mean that retailers from around the world are warming up to the currency. Amid a crackdown in China, mega-online retailer Alibaba has decided to ban Bitcoin on its online trading platforms and stores. This will prevent retailers who use Alibaba’s various systems from accepting Bitcoin as a form of payment.
While Alibaba is not yet well known in the West, it is actually the largest online retailer in the world by some measures, beating out both Amazon and ebay. Alibaba supports direct sales, facilitates purchases between parties, and conducts other online businesses, so its ban is a serious blow to the currency.
Bitcoin ATMs Won’t Be Setting Up Shop in Taiwan
Taiwan’s government has flat out rejected the installation of Bitcoin ATMs on the island. The Financial Supervisory Committee has rejected a bid by Robocoin to install ATMs on the island, and has determined that Bitcoin is not a legal currency, and thus can’t be used as a form of exchange.
Bitcoin ATMs will, however, be set up in Hong Kong, were Robocoin will not even have to apply for permission. This should come as no surprise given that Hong Kong is known around the world for its lax regulatory environment. In December, however, both China and India began to crackdown on Bitcoin, suggesting that some Asian governments may be cooling on the currency.
Ghash.io Being Abandoned in Face of 51% Attack
One of the biggest criticisms of Bitcoin is that if an organization is able to gain 51% of all computing power dedicated to the currency, it could potentially undermine the currency through double spending, and other interferences. This so-called 51% attack has long been cited as one of the fundamental flaws in Bitcoin.
This past week Ghash.io, a large mining pool, actually secured over 40% of computing power but an interesting thing happened. Miners began to abandon the mining pool in mass, suggesting that the Bitcoin community itself may indeed be capable of protecting the currency. Could the Bitcoin community prove to be self-regulating? As of right now, there’s good reason to believe so.
Singapore to Tax Bitcoin as Product
Regulators around the world are indeed cracking down on Bitcoin, but not in the way many people originally assumed they would. Regulators are less interested in banning the digital currency and more interested in getting their cut of the profits through taxes. Singapore’s tax authority has announced that it will tax Bitcoin like any other product, such as an iPhone or laptop.
Around the world, governments are recognizing Bitcoin, but generally as an investment vehicle or product, rather than a currency. Doing so allows tax authorities to collect revenue. Given the millions upon millions that some investors have earned off of Bitcoin, the potential funds generated through taxes could be substantial.