Another Sign That Bitcoin Is Here to Stay

Add another to the growing list of companies accepting Bitcoin. Dell will let you buy your next PC using the cryptocurrency via a partnership with Coinbase, a Bitcoin wallet supplier.

"Bitcoin is a new payment option intended to offer even more flexibility for customers. Bitcoin payments can be made easily from anywhere in the world, and offer reduced payment processing costs," Dell said in a Q&A posted at its site.

That's a powerful endorsement from one of the world's largest computing retailers, and suggests that Bitcoin is well on its way to achieving permanent status as a currency alternative.

One of these deals is not like the others
We can debate whether that's a good idea. My Foolish colleague, Leo Sun, lists plenty of good reasons for why it might not be, in this article. For our purposes, I'd rather focus on why Dell's backing is different from others who've come to accept Bitcoin.

Popular names include Overstock.com and Zynga (NASDAQ: OSTK  ) . Tesla Motors (NASDAQ: TSLA  ) also gets mentioned from time to time, but shouldn't. Why? A Lamborghini dealer in Costa Mesa, CA took to the Internet in December to brag that it sold a Model S to a customer paying with Bitcoin.

"Bitcoin, a fully encrypted and fully digital currency, has been used by a recent client of ours to pay for a Tesla Model S Performance we had in our inventory.  That's right, an electronic currency was used to purchase a fully electric vehicle," the dealership wrote in a blog post.

Wouldn't we all buy a Model S with Bitcoin if we could? Living the dream doesn't equate to proof of a sustainable retail market. Credit: Lamborghini Newport Beach.

What makes Dell different is that there's a genuine business need for computer equipment. If the company is serious about accepting Bitcoin for big-ticket purchases, it could get Chief Financial Officers and company treasurers experimenting with the cryptocurrency for capital spending.

Think of how airlines hedge fuel prices. Betting on Bitcoin isn't the same as buying a future contract, but I could see experimenting with a small fund earmarked for 'nice-to-have' special projects that exist outside the normal budgeting process, limiting the potential impact of Bitcoin's noted volatility.

Who really wins
There's reason to believe we're headed for just this sort of future. Coinbase claims that 34,000 businesses trust the company to "integrate" Bitcoin payments, including several big names other than Dell. Meanwhile, both major search engines now allow for Bitcoin pricing and currency conversion.

So who wins if Bitcoin goes mainstream? Cameron and Tyler Winklevoss, for starters. The twins are closing in on getting a Bitcoin ETF up and trading on the NASDAQ market, which would add protections for common investors like you and me. (I'd wait for its arrival before committing any meaningful investment funds to the cryptocurrency.)

But the biggest winner of all could be Coinbase and its early backers, who've committed $31.7 million in funding as of this writing, TechCrunch reports. Andreessen Horowitz and Union Square Ventures are among the venture capitalists to have invested in Coinbase.

A few months ago -- amid the Mt. Gox disaster -- predicting a windfall for any of Bitcoin's backers would have seemed folly. No longer. Dell's backing is just the stamp of approval the cryptocurrency needs to become a permanent fixture.

One thing you need to know before investing in Bitcoin ...
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3035948, ~/Articles/ArticleHandler.aspx, 12/18/2014 3:34:56 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement