Thursday, January 9, 2014

Overstock CEO: I May Accept Bitcoins But I Am Not Holding On To Them

I just had this illuminating twitter exchange with Patrick Byrne, CEO of Overstock.

This supports my view and that of University of Chicago professor Eric Posner that Bitcoin is a transfer mechanism not money. No one in the business community is pricing goods in fixed bitcoin amounts or holding onto bitcoins, once they get them. And I am confident that anyone buying from Overstock via Bitcoin is converting in their head the dollar value of doing such a transaction. No one is thinking in terms of Bitcoin, the conversion process into dollars is going on by both buyers and sellers.

Byrne's question re derivatives for hedge risking is more of the same, he doesn't want to have exposure to Bitcoin price volatility. He wants exposure to the dollar.

Bottom line, Bitcoin is more of a jumping jack travelers check, than money.


  1. @Good. I had begun to wonder whether Dr. Byrne had gone over to the dark side.

  2. I don't use Twitter, but feel free to send him this Robert, along with your mea culpa for continuing to be so wrong...

    1. Um, that didn't disprove anything Bob said. Dummy.

  3. Wasn't Keiser one of the first people who developed some of the financial instruments involved in the financial crisis?
    Doesn't that kind of show that this is an elite operation?
    Isn't that why Honey Badger, a couple of posts back, was bragging on the "network effect" and "media clout: of the Bitcoin backers? How could he be so sure of having the media' backing unless the operation came out of the elite?
    See? Gotcha! If you listen carefully, these games give themselves away.
    Dr Byrne, being a student of Kabbalah, I am sure you aren't taken in by BTC

    1. @ Lila

      I think your "conspiracy detector" is overheating...

  4. And the reason Patrick Byrne can convert his bitcoins into dollars is because there is a line of people wiling to buy them from him. Many of these people are buying these Bitcoins as an inflation hedge (store of value). Bitcoins will only become the primary numerare after a sufficiently large amount of wealth has transferred into them. Should this day come, one bitcoin will be worth hundreds of thousands of dollars. So there you have it: Store of Value first, predominant numerare second.

  5. From the Wired article:

    ...But Byrne counts himself among the bitcoin proponents who see it as a currency whose value is controlled by people, not governments. That fits with his general worldview. As a philosophy student at Stanford, he studied the Austrian school of economics, which believes that our economy should rely on the judgments and choices of individuals, not a central authority, and he has long railed against what he sees as governmental overinvolvement in a precarious economy.

    Like so many others, he says bitcoin is like gold. No government can devalue it simply by making more of it. “We want a money that some government mandarin can’t just whisk into existence with a pen stroke,” he says. “Bitcoin is that.” What’s more, it lets you store your money in a place that’s outside the control of big banks. “It just makes the world a better place,” he says. “It lets you get out of that world where you have to store your money with institutions you don’t trust.”


  6. Oh dear. Then I must classify Dr Byrne as "doubtful case," when it comes to controlled opposition.

    Bitcoin may be out of the reach of governments, but it's not out of the reach of the private researchers, defense wonks, and media barons to manipulate via coordinated buying and selling from the inside.

    The outfit that produced BTC is a rather odd futuristic place, but Israeli defense cryptographers work in it, and that's enough for me to wonder.

    It's outside the grasp of "governments' if you take labels seriously.
    If you consider private corporations and spymaster colluding together with NGOs to conduct policing operations (rather than war) and lawsuits to ruin (rather than loot) it is just another kind of racket.


    Me - I think this is guy either created it, or knows who did, or has a team/colleagues who did.

    Just saying. Looks like the NSA has some worries about him too, which would be just what most of these things games are about.

    So - there goes my chance of cashing out on my research with a central American bad guy for big bucks..


  8. "I May Accept Bitcoins But I Am Not Holding On To Them"

    Funny, that's what the rest of the world says about dollars...

  9. Only a fool would purchase shitcoins as a hedge against inflation. Don't waste your dollars, buy gold and silver.