Dell is now one among a growing number of major retailers that are accepting Bitcoin for consumer sales. Powered by Coinbase, the computer company’s main e-commerce site, Dell.com, joins Overstock, Expedia, TigerDirect and others as a way to spend your cryptocurrency on electronics and more.
Unlike Overstock and Expedia though, Dell is a behemoth in terms of sales and size. As the tenth largest retailer on the internet, Dell.com racks in about $3.6 billion last year according to data compiled by Statista. But what does this mean for Bitcoin? Is Dell going to cause a domino effect for other top 10 retailers, or is it just an outlier trying to cash in on the Bitcoin hype?
Why Dell Matters (and Doesn’t)
It’s always good news for Bitcoin when another retailer joins the fray. It’s also very good news for Bitcoin that a retailer in the top 10 is on board. But Bitcoin still has a long road ahead to prove itself as a viable currency in a number of ways.
For starters, Dell.com is by no means the bread and butter of the company, which earned $57 billion last year. For those keeping score at home, that’s just six percent of Dell’s total revenue. Dell’s money is in making electronics, not selling it, so while the company is famous and known for its direct-to-consumer way of selling, Dell.com is still a minor (albeit significant) part of the overall bottom line.
Second, Dell.com is still in the electronics niche, and the entire point Dell adopted Bitcoin is to attract an audience, not create one. You can tell by the Alienware promotion Dell is running alongside the introduction of Bitcoin, offering 10 percent off all Alienware products under $1500. It’s clear Dell is looking to take advantage of people willing to make big purchases using the valuable cryptocurrency, which often happen to be the gamers who owned the graphics cards once needed for effective Bitcoin mining. To add to this niche, while Dell is allowing sales across the entire site in Bitcoin, it’s unlikely many sales will come from its business division, which make up a huge chunk of Dell.com’s overall revenue.
These realities are not necessarily bad. Dell is still the biggest retailer, manufacturer and company to accept Bitcoin. They help show how, despite this win, Bitcoin is still very one-dimensional, and that the currency needs a way to branch outward in a different kind of direction to prove successful in the coming months.
Building a Currency, not a payment method.
So far, Bitcoin with the big players is nothing more than a payment method. Bitcoins come in, are instantly turned into fiat currency, and that’s it. Bitcoin sits on the payment portal alongside PayPal and all the other major payment gateways.
This is fine as long as you want Bitcoin to remain as a payment gateway and nothing more. If you see Bitcoin as a currency however, then you want to see more than just this one-dimensional activity. The easiest measurement of this is seeing multiple dimensions of business being conducted exclusively in Bitcoin. For example, is Dell accepting Bitcoin for computer invoices by Newegg and TigerDirect?
Probably not. Not yet, at least. Bitcoin remains in a very experimental, fluctuating state. The more stable it becomes however, the more payments we will see across the verticals of a business, rather than at the “last mile” between retailers and end-users. This will also in turn lead to the storage of assets in Bitcoin, which is another must-have in order to grant Bitcoin currency status.
Another issue Bitcoin still has is the lack of financial versatility that other payment gateways have in comparison. Bitcoin is like paying in cash, but whenever your customer pays it’s as if they pay with a courier, instead of paying in person. You have no way to verify the customer is the courier, and have no way to ensure they are paying with their own money, or that if the customer wants a refund you’re giving it to them, as opposed to someone else.
On one hand, many praise the confidentiality of Bitcoin. These same people forget that currency is about trust and identify verification. If you can verify a wallet always belongs to someone, then you can confidently refund that individual and confidently associate those funds with a customer. Doing business is about the fluidity the currency you use, and this is one realm Bitcoin has yet to offer any viable solution.
Ultimately Dell is of course a welcome addition for those who want to see more mainstream attention to Bitcoin beyond the “fad” status some financial experts give it. That said, Bitcoin is still in need of much incubation in order to get the viability it needs to deserve currency status.