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. Tesla Motors (TSLA -1.92%) 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.
