Dell Gets $50,000 Server Order Paid in Bitcoins

The PowerEdge deal comes less than a month after the tech vendor announces it was accepting the crypto-currency in purchases made on its Website.

Michael Dell

Michael Dell announced on Twitter in July that his namesake company would let customers buy Dell products using Bitcoins, making the tech vendor one of the largest businesses to accept the digital currency.

A month later, the Dell CEO said on Twitter that the company had received an order for PowerEdge servers worth more than 85 Bitcoins, or about $50,000. There were no details about the customer that bought the systems, but it's likely among the largest Dell has received since accepting Bitcoins as payment.

Dell officials initially announced their intentions with Bitcoin July 18 through a number of avenues, from a tweet by Michael Dell to a blog post to a Web page dedicated to the initiative. The Bitcoin program currently is offered only in the United States, and initially was aimed at consumers and small businesses. The company is partnering with Coinbase, a 2-year-old, third-party payment processor. It took Dell two weeks to set up the agreement with Coinbase.

Dell is making a substantial push to encourage customers to use Bitcoins. The vendor is offering $150 off Bitcoin purchases of Alienware products—an offer that expires Aug. 14—and has laid out a three-step process on its Website for buying products using the crypto-currency.

Dell is joining other vendors, like Expedia and Overstock, that also use the controversial payment method in their transactions.

"We’re piloting Bitcoin, the world’s most widely used digital currency, as a purchase option on for consumer and small business shoppers in the U.S.," Dell blogger Laura Thomas wrote. "We’re excited to bring you the choice and flexibility this payment option offers."

According to Dell's Website, customers can fill their shopping cart as they normally would, but rather than paying with a credit card, they can either pay director from the Bitcoin wallet by using the generated payment address or by scanning the QR code with their smartphone. In addition, if the customer has a Coinbase account, they can log in and send the payment in directly.

Some have likened Bitcoins to PayPal, which launched in 1998 as a way to electronically transfer and accept payments over the Internet. However, David Furlonger, vice president and Fellow at research firm Gartner, told eWEEK in January that any comparison with PayPal represents a misunderstanding of Bitcoins.

"Bitcoin is fundamentally different; it's not a payment mechanism per se," Furlonger said. "Bitcoin is a currency and should be compared with other crypto-currencies."

Dell's program to accept Bitcoins as payment is an indication of the growing popularity of the crypto-currency. However, there continues to be concerns over the security of the digital security. There have been numerous stories of hackers stealing Bitcoins, including the case of Mt. Gox, at one time a leading Bitcoin exchange that went bankrupt in February after cyber-criminals stole 750,000 Bitcoins—worth about $473 million—from the company's users.

The theft raised questions about the viability of the crypto-currency and the exchanges that market them. Dell's SonicWall researchers said in a report last year that there was a marked increase in the botnets aimed at Bitcoins. However, according to Dell blogger Thomas, Bitcoin users "can take precautions to ensure security. We’ve enlisted Coinbase, one of the most secure, reputable and widely used bitcoin platforms in North America to help with this. Information on their security protection can be found here."