Dish Network just became the largest company to accept bitcoin, a major endorsement for the still-nascent virtual currency.
The company has teamed up with Coinbase, a startup funded by big Silicon Valley investors that makes it easy for merchants to accept bitcoin. Dish customers will be able to pay their bills in the virtual currency starting in the third quarter of this year.
Merchants are wary of bitcoin
Most merchants are wary of using bitcoin because of the technical challenges, fluctuating price, and legal ambiguity. However, all of those issues are increasingly surmountable. Companies like Coinbase streamline the process of accepting virtual currency. They can also account for volatility by continuously adjusting the price customers pay in bitcoin to reflect the market rate in dollars, and immediately converting the bitcoin after its received to minimize loss. Last, the IRS and Treasury Department have published guidelines for bitcoin users, clarifying its status as legal and regulated.
Previously, Overstock.com was the largest retailer accepting bitcoin in the US. Dish is more than 10 times the size of Overstock by revenue and has 14 million subscribers. Overstock began accepting bitcoin in January and claims to have done $1.6 million worth of bitcoin transactions since then.
As bitcoin's user base grows, the barriers to entry for merchants drop, and companies like Coinbase ramp up, we're likely to see more large merchants sign on to the currency — although at this point, the biggest benefit to retailers still seems to be publicity.