In explaining their reasoning for preparing to accept bitcoin as payment for services, Dish Network (DISH) COO Bernie Han explained that “Bitcoin is becoming a preferred way for some people to transact and we want to accommodate those individuals.” Taking bitcoin is a smart move, but not because of its superior properties as a payment system. But rather, it’s smart because accepting bitcoin buys a lot of free press.
It buys fleeting free press from the major news agencies, of course. But it also buys loyalty from bitcoin’s vocal, ideological proponents.
Bitcoin the Currency versus Bitcoin the Commodity
For bitcoiners, reforming BTC’s image is a major concern. Not in the matter of wiping away memories of bitcoin’s popularity on shady deep web sites like Silk Road. But in this case, it’s a matter of helping bitcoin fulfill the “currency” part of its “cryptocurrency” moniker.
While governmental say-so isn’t necessarily important to its fans, how bitcoin is adopted by the global public certainly is. When bitcoin has been defined by a major government, it’s not usually as a currency. The US calls it “property;” China calls it a “special virtual commodity.”
Hardly any note its propensity for facilitating long-distance wealth transactions, which is one of BTC’s main advantages as a disruptive technology. For widespread adoption past the speculators, and to fulfill the hope that bitcoin could one day replace “fiat” government-backed currencies, bitcoin must shed its commodity designation. It must be used on a widespread scale as a currency.
And of course, like any currency it must be exchangeable for goods and services. Like paying your cable bill.
Dish Network Has Just Made Some (Real) Digital Friends
Let’s return to Dish Network. Han made the decision to accept bitcoin after noting that several of his tech-savvy employees wanted the option.
Han does not give any indication that he is a bitcoin aficionado himself. He is serving the market, and, more specifically, DISH’s stockholders. As a COO beholden to his investors, Han always has to consider one thing first: what does this add to our company’s bottom line?
Does accepting bitcoin ensure more users will pay their bills? Probably not. Does it save the company money? Considering they’re hiring a third party (Coinbase) to handle the transactions, transaction fee savings will most likely be negligible.
If it doesn’t save money or ensure more revenue, the answer must be less tangible. But it’s something every company strives for. Brand loyalty.
You’d be hard pressed to find a person who’s loyal to their cable company; you never hear anyone exclaim “I love Comcast (CMCSA)!” But accepting bitcoin gets Dish Network some definite fans. It gets them right with BTC’s proponents, who might be small in number, but are certainly dogged in their pursuit of getting bitcoin accepted at more and more businesses.
R/Bitcoin Says Thumbs Up
For a quick illustration of this, look to one of the more popular online spaces for bitcoiners – the reddit.com subreddit R/Bitcoin, which sports 121,000 users.
The most prominent posts on the site usually concern small businesses, even just a single pizzeria, accepting bitcoin as currency. So, when a $27.33 billion market cap company began accepting, it garnered a huge amount of attention. In the hours following the Dish Network announcement, the top three posts on the bitcoin subreddit were all dedicated to the news, with hundreds of comments and thousands of upvotes cheering the company’s decision.
Bitcoiners’ most favored ally before the DISH decision was Overstock.com (OSTK) the moribund online marketplace, who began accepting BTC for goods last fall. Accepting bitcoin bought Overstock a lot of fans – which they desperately need. The company’s stock has fallen 47.99 percent in 2014 alone, as they struggle in competition with Amazon (AMZN) . Who do not accept bitcoin.
Low Risk, Potentially High Reward Move for DISH
With DISH, it’s a similar scenario, although DISH’s situation is not as pressing as Overstock’s. Rival Comcast is making big moves, like trying to merge with Time Warner (TWC) . DISH needs to shore up its reserves and stake its claim. It needs to set itself apart. Accepting bitcoin gets them right with what they see as being tech pioneers. Tech pioneers with an evangelical bent who, thanks to your adoption of their favorite digital payment method, will spread positive word on your company for you.
Taking bitcoin is a low-risk gambit that buys thousands of die-hard fans without costing the company terribly much. The only downside is if the currency suddenly tanks. But considering that DISH probably will be converting their BTC into USD immediately upon receipt of payment, that’s not really an issue.
And then there’s the less cynical view,. And that is if bitcoin does take off, DISH is first on the scene. But that’s not what DISH and COO Han are thinking right now. For the time being, they’re basking in the free press taking BTC buys.
DISH is gearing up to receive thousands of bitcoins. But more importantly, they’re gearing up to receive thousands of new cheerleaders.