Bitcoin Blooper Adds Up to Brief 85% Discount at Overstock.com

By VICTOR REKLAITIS

‘A dishonest customer could have used this bug to make ridiculous sums,’ says cybersecurity researcher Brian Krebs.

Overstock.com this month briefly treated a bitcoin offshoot as though it were the No. 1 cryptocurrency itself, allowing independent researcher Brian Krebs to score a discount of 85% in buying an item from the online retailer.

Such huge discounts aren’t available anymore as the mixup has been resolved, Krebs said in a post Tuesday at his blog. The prominent writer on cybersecurity topics added that he donated the “profit” of $66 from his research after Overstock OSTK, +0.06% told him to keep it.

The situation came about because Overstock was accepting bitcoin as though it were bitcoin cash, even though there’s a wide gap in value between the two virtual currencies. A single bitcoin BTCUSD, -0.73% was recently changing hands at $14,000, while bitcoin cash was fetching around $2,400, according to CoinMarketCap.com data.

Krebs has documented how he was able to buy $78 worth of LED bulbs by sending $12 worth of bitcoin cash, meaning he scored a discount of 85%. He also was refunded with $78 worth of bitcoin, rather than $12 worth of the offshoot crypto, which was created last year by a team of people who forked the bitcoin blockchain ledger.

“Consider the implications here: A dishonest customer could have used this bug to make ridiculous sums of bitcoin in a very short period of time,” he wrote in his “Krebs on Security” post. For example, someone could have paid only $15,000 for a diamond ring that Overstock was selling for $100,000, then returned it for a “a tidy $85,000 profit,” the researcher said.

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And see: Jeff Gundlach takes a shot at bitcoin

Overstock was an early adopter of bitcoin that began accepting it in 2014 by teaming up with cryptocurrencies company Coinbase. It suggested this week that Coinbase was to blame for the mixup.

“We worked with our cryptocurrency integration partner, Coinbase, to ensure they resolved the issue,” Overstock said in a statement, according to Krebs. “We have since confirmed that the issue … has been resolved, and the cryptocurrency payment option has been re-enabled.”

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