Jonathan Johnson, ex-chairman of Overstock’s board of directors, touched on the benefits of cryptocurrencies and noted the tremendous potential of blockchain-based technology. Despite the currently hemorrhaging market, he still sees a lot of advantages in utilizing cryptocurrencies over traditional credit card payments.
Better Than Credit Cards
Currently sitting on the Board of Directors of Overstock.com – a major online retailer accepting cryptocurrencies as a payment method — Jonathan Johnson shared his overtly positive sentiment towards virtual currencies and their underlying technology with Forbes.
According to Johnson, Overstock.com gets around 0.2 percent of its total revenue from cryptocurrencies. This percentage sums up to somewhere between $68,000 and $120,000 a week. The ex-chairman notes that this is a growing trend, despite the fact that the overall cryptocurrency market has been rapidly declining over the first half of 2018.
Overstock is partly known for being the first major online retailers to embrace bitcoin, and Johnson has frequently expressed his affinity towards the cryptocurrency. However, now that the market is correcting, one would expect to see signs of concern — if not negativity.
Yet, despite the volatility, Johnson remains entirely positive about cryptocurrencies as a form of payment.
For starters, he notes that accepting traditional credit card payments costs the company a pretty penny:
We pay a processing fee for credit cards, and we employ about 40 people in our fraud department. That’s a cost of doing business with credit cards.
At the same time, Johnson notes that cryptocurrencies don’t have any of the aforementioned issues — hence making it a whole lot cheaper to do business:
When we take cryptocurrency, we have a very small transaction fee with Coinbase, much smaller than our credit card processing fee, and we have no fraud prevention department. It’s like a cash transaction. For us, that is a much cheaper way of doing business.
A Call for Regulatory Clarity
Johnson also conceded that he’s “not a fan of regulation.” So much so, in fact, that he believes blockchain-based technology shouldn’t be regulated.
Referring to initial coin offerings (ICOs) as means to gain capital, Johnson also pointed out that the government’s uncertainty is constraining capital formation methods and the further development of blockchain-based technology.
Still, Johnson also admits that some use cases may need further governance:
We should not be regulating this technology. If there are uses of it that need regulation, maybe.
To that point, the US Security and Exchange Commission (SEC) has been quite active on the matter of ICOs, outlining that they are obviously considered as securities. What is more, the regulatory agency also launched its very own mock ICO called HoweyCoins in an attempt to educate investors on the risks of investing in fraudulent ICOs.
Johnson commented on the mock ICO, saying that it caused more confusion than clarity.
However, the SEC has recently appointed Valerie Szczepanik as an Associate Director of the Division for Corporation Finance and Senior Advisor for Digital Assets and Innovation — meaning more regulatory clarity is likely on the way.