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Bitcoin as a technology cryptocurrency continues to grab attention of those interested in it’s unique quality of a decentralyzed peer to peer anonymous transaction system. And that there is no controlling central bank regulating it as with fiat currency. But is Bitcoin ready for the mainstream market? Is the mainstream ready to embrace Bitcoin?
One large online retailer, Overstock.com, is willing to find out.
(Read related: Overstock.com CEO attacks Krugman: “Hopefully Bitcoin will destroy central banking”)
Kurt Wallace: Bitcoin as a technology crypto-currency continues to grab attention of those interested in its unique quality of a decentralized, peer-to-peer, anonymous transaction system, and that there is no controlling central bank regulating it as with fiat currency. But is Bitcoin ready for the mainstream market? Is the mainstream ready to embrace Bitcoin? One large online retailer, Overstock.com, is willing to find out. Here to discuss with us is CEO and Chairman of Overstock.com, Dr. Patrick Byrne. Dr. Byrne, it’s great to have you with us on Rare.
Patrick Byrne: Kurt, it’s my honor and I hope that you’ll call me Patrick through the interview and not Dr. Byrne.
Kurt Wallace: Okay, very good. Patrick, last week your company began accepting Bitcoin. How has it been going so far?
Patrick Byrne: Very nicely. We put up the numbers, we did about $130,000 in the first 24 hours or so and we’re getting a lot of support and a lot of new customers. It was clearly the right thing to do economically, there’s clearly a demand for it. I think that some of the support, some of the purchasing coming in – just people who want us to know – people in the Bitcoin community who want to thank us for breaking the ice and jumping way, way ahead of the curve. The people may have been expecting some small players or tiny players taking Bitcoin. Some people expected small players, and maybe someday medium, and we just jumped ahead and I think that we forced the hand of everybody else so they’ll start taking Bitcoin. So, a lot of people have been leaving comments and talking to our customer service agents, letting us know that they’re shopping with Overstock as a sign of support for wanting us to take Bitcoin.
Kurt Wallace: Do you see crypto-currency as an indicator for political and cultural shift?
Patrick Byrne: Yes I do. I guess I think of it as the – what was it Jefferson said, something about if the natural order of things for government to expand and liberty to contract – and it’s just the nature of things. There are organizations, not just government, but organizations want to grow. They want to be, there’s all these internal dynamics that make corporations turn into bureaucracies – which I fight kind of continuously – and government, just by nature, is going to get bigger and wants to get bigger and bigger. That’s made worse when you get a strongman-type figure and you go on a road-to-serfdom-type adventure where the strongman promises, “Oh, you guys have this problem and I can fix this problem.” And then his solution doesn’t fix it and he says, “Well, if you only give me more power, then I can fix it.” Then you give him more power, and eventually you see the rise of a Perón or a Mussolini, or probably some other politicians you could name. Crypto-currency really undermines that process by taking money out of the hands of government. For years, I’ve been the proponent of gold-backed currency. Gold-backed currency solves, and tell me if I get into too much detail…
Kurt Wallace: No, no…please…
Patrick Byrne: Gold is – we from the Austrian school believe – gold solves a lot of the defects of fiat money. You want a monetary system, which at its base, is not tied to something that a Mandarin government can just whisk into existence with a pen stroke, but is tied to something real that they cannot manipulate, or they cannot just create. Gold has served that purpose for five thousand years, and has all these wonderful properties. For five thousand years – it grows, with this mankind stock it grows – gold grows at a rate of two or three percent. It’s like a built-in tailor roll. There are economists who say, “Look, we should manage the economy by tinkering with the money supply and set it at, sort of, three percent and let it run.” Well, gold has that as a natural feature anyway. And it has this great benefit that government mandarins can’t make it up. Now that is manageable, that you can’t send it through a fiberoptic cable, but you can set claims on it. I’ve always had this dream that we can get back to a gold-backed current money in some way, if only through gold-backed certificates of deposits, and everything would be truly convertible. However, Bitcoin accomplishes a whole lot of what gold would accomplish. And that is – in Bitcoin’s case – it’s the gods of mathematics, so to speak, who have limited the supply of Bitcoin. Not the gods of mining or how much gold is in the earth. But there are 21 mathematics degrees – there are 21 million Bitcoin units that there can possibly be – and it’ll take mankind, I think, another several decades to find (we have found 12…we have data-mined 12, but the mining gets harder and harder) so it’ll take less than a century to get to the 21 million units. There is a built-in, 3% or so increase, which is just that and mixed gold. Government can’t create more of it than there is. They can’t write a rule or change the law of mathematics. Hence, it can constrain government in a way that we have not been able to successfully constrain government to things like constitutions.
Kurt Wallace: Dr. Patrick Byrne of Overstock.com, now accepting Bitcoin. Thank you for spending time with us today on Rare.
Patrick Byrne: Thank you, Kurt. My honor.