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I am new to the crypto currency world and fascinated by its growth. I looked at some of the companies that accept bitcoins for their products. companies accepting bitcoin

Lets say i buy an Xbox from Microsoft for x bitcoins. On the date of buying the x bitcoins correspond to z dollars. After few hours, the bitcoin cost reduced from x to y. (The price is volatile right) How Microsoft will handle this situation? They are ready to take the risk? Or they exchange to dollars or any currency as soon as I buy the product in bitcoin?

  • They are ready to take the risk? Yes. – MCCCS Aug 26 '17 at 8:38
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Many companies will instantly convert bitcoins to fiat upon receiving. This is done by the payment gateways themselves like Bitpay, coinify.

However, these days you see several website keeping the bitcoins without converting them. You can use payment gateways like blockonomics, blockchain.info, coinsimple etc. This is due to several reasons:

  • Extra fee in converting
  • Regulations/KYC in accepting fiat
  • Bitcoins are scarce
  • Adoption has increased. Employees are taking wages in BTC, and business can buy stuff like airline tickets and other required goods directly using bitcoins

If you hold bitcoins over a long enough period (say 1year+) you will see that the value has always increased https://www.reddit.com/r/Bitcoin/comments/5vuox8/i_dont_mean_to_brag_but_i_bought_bitcoin_at_the/

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You hit the nail on the head about them willing to take the risk. I believe it is less about the risk of price fluctuations and more about appearing like a "futuristic" company with the risk of having 1% of your income losing value (https://www.quora.com/What-percentage-of-transactions-on-Overstock-com-are-in-bitcoin). In other words, only a relatively tiny fraction of consumers actually pay for X in Bitcoin, so why not get some publicity that comes from the decision to accept Bitcoin.

This is becoming less true, because adoption has been increasing. And now I think there is more incentive to accept bitcoin simply because it's an asset that is increasing in value. In this case, they are more likely to hold on to it for a few years and not immediately sell it on gateway like Bitpay.

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