Electronics store accepts bitcoins

An online electronics store launched last March may turn out to be a pioneer of sorts, by allowing only the online currency Bitcoins as payment.

 

Bitcoinstore.com sells at lower prices by eliminating or at least minimizing transaction fees charged by payment processing firms like PayPal, PC World reported.

 

"This is the first time a store has been able to provide a proof-of-concept...of how much people can save with bitcoin," it quoted Jon Holmquist, Bitcoinstore's California-based head of marketing, as saying.

 

He added the new store is providing online retailers like Amazon.com "motivation" by "taking away their customers."

 

Bitcoin seeks to save on transaction fees by using a peer-to-peer verification and transmission system.

 

While Bitcoin transactions are free, people may pay a low fee to speed up the transaction verification.

 

Holmquist said eliminating payment processing fees in a low-margin business such as consumer electronics "means the difference between making a profit and going under."

 

PC World said the average order size on Bitcoinstore is about $400, with Ingram Micro handleing Bitcoinstore's shipping mainly to customers in the United States.

 

But Holmquist said international buyers have so far kept away due to overseas shipping costs and high customs duties on electronics in many countries.

 

Linking bank accounts

 

Holmquist said Bitcoinstore is eyeing payment processors that could link bank accounts with bitcoin so people can convert their money into bitcoins.

 

"We are watching all of the payment processors very closely ... I think (bitcoin) has the potential to basically be a PayPal-like system," Holmquist said.

 

$850k target

 

Bitcoinstore said it must sell $850,000 by June 30 "to keep (its) competitive prices," and has sold $124,225 as of 3:10 p.m. of April 8, Manila time.

 

The store had aimed to sell $850,000 in consumer electronics in a three-month period ending last March but fell short due to "technical problems" not related to bitcoin, PC World said.

 

Its brisk trade in March prompted its electronics supplier, Ingram Micro, to renew its contract.

 

Limited potential

 

PC World said Bitcoin's potential is somewhat limited because it is hard for people to obtain.

 

It said there are many exchanges where bitcoins can be bought, such as Mt. Gox in Japan and its U.S. partner, CoinLab, though it can take days to actually obtain bitcoins. — TJD, GMA News