Newegg has joined the list of businesses willing to accept Bitcoin payments from customers. The online electronics retailer announced today that customers will be able to pay for their purchases via the virtual currency. Newegg Bitcoin payment option is powered by a partnership with BitPay, which is transaction processor for the crypto-currency.
For those who have no knowledge of crypto-currencies like Bitcoin, they’re basically an online currency that’s volatile and not backed by any guarantees. Which is why some people believe its only a bubble waiting to be burst. Major fluctuation in Bitcoin value has already been witnessed and since its not backed by any guarantees or materials many approach the subject with caution. Granted that conventional currencies are not backed by gold anymore but at least there’s central regulation and sovereign guarantees.
Currently a Bitcoin is worth around $620. So if Newegg customers choose to pay via Bitcoin they’ll actually find the transaction cost to be cheaper than credit cards, this is one advantage that brings in users who shop online frequently. To shield itself from Bitcoin’s volatility Newegg uses a transaction processor. BitPay immediately pays Newegg the US$ equivalent of Bitcoin thus mitigating the exchange rate risk for the retailer.
The likes of Shopify and WordPress have already started accepting Bitcoin payments and we’re only going to see more companies and services open up to virtual currencies. Newegg sees it as an opportunity to aid its expansion beyond North America. It believes Bitcoin payment support will appeal to new international customers.