Microsoft Goes Back and Forth on Bitcoin
According to multiple reports on the internet, Microsoft has quietly taken down the option that enabled purchases on its online store to be made using bitcoin. According to discussion threads on several cryptocurrency forums, it seems that the move was first publicly noticed around the start of January 2018 without any official statement from the company.
When contacted, the Microsoft chat support confirmed the company’s decision to no longer accept bitcoin. According to the representative contacted for this article, the company’s support team was “last updated on December 27, 2017” with no timeline available on when customers would once again be able to use bitcoin or other cryptocurrencies such as Ripple.
The support member concluded the conversation with, “Rest assured that we will send an email to you once we receive an update on this matter.”
Since the conversation with BTCManager, Microsoft has just as quietly returned the use of bitcoin as a form of payment. A Microsoft spokeswoman, speaking to news.com.au, confirmed the temporary suspension of payments made using the cryptocurrency while also stating that the company has reinstated the option after reviewing the situation.
While not a formal press release, she explained that Microsoft necessitated the move because they were “working with [their] provider to ensure lower bitcoin amounts would be redeemable by customers.”
To be clear, the incident was by no means a pump and dump scheme lanced by the software company. As Bill Gates is reportedly a massive supporter of a decentralized digital currency, we can assume that the issue was entirely technical.
Further, these events are steeped in an interesting history with Gates’s company. In 2016, the company announced that users would no longer be able to use the cryptocurrency for payments. Only a day after that, however, Microsoft released a statement claiming that the announcement was inaccurate and “inadvertently posted,” before promptly reinstating bitcoin as a payment method.
Steam, the digital video game distribution platform, also stopped accepting bitcoin for payments only a few weeks ago, in December 2017. According to a blog post published by the company, the decision was made due to the cryptocurrency’s unjustifiably high transaction fees and extreme volatility.
After all, end-users trying to pay with bitcoin or other cryptocurrencies would be confused when a large part of their transaction total is lost to network fees. Steam, unlike Microsoft, has not returned to bitcoin as a form of payment.
The Seattle-based firm added the option for payments in Bitcoin around three years ago, in December 2014. Like Steam, the software giant used BitPay as its payment processor, presumably because the service allowed Microsoft to directly convert the cryptocurrency received for purchases into an equivalent fiat amount.
Even so, bitcoin’s price saw much more volatility in 2017 than any previous year, especially considering that it ended the year with a valuation around fifteen times higher than 2016.
Since the transaction fee for each transaction is measured in bitcoin itself and not a fixed fiat amount, the rapidly appreciating price of the cryptocurrency has also resulted in absurdly high costs. For retail transactions that range anywhere from tens to a few hundreds of dollars, the fees can be up to fifty percent of the transacted amount.
Other popular and highly valued cryptocurrencies are also facing similar issues, with Ethereum being the only competitor to have fees in the double digits currently.
Given that bitcoin’s extreme volatility and increasing transactional problems are turning people away from using it as a currency, it is becoming increasingly likely that people will only continue to use it as a store of value. While some argue that this goes against the cryptocurrency’s original ideology as laid down in its whitepaper, others believe that it is a natural evolution for bitcoin.
That said, with off-chain scaling solutions such as the Lightning Network on the horizon, it is possible that the digital currency will once again become viable for retail transactions. In the vacuum of such a provision though, we can now expect many other services also to announce the withdrawal of bitcoin as a payment method.