Discussion and news aggregation platform, Reddit, has reportedly stopped accepting bitcoin as a payment method for its Reddit Gold membership. The company was one of the earliest adopters of the pioneer cryptocurrency, after embracing it in 2013. However, it has been forced to change its stand in lieu of Coinbase withdrawing support for its Merchant Tools.
Reasoning the Bitcoin and Reddit Divorce
The news of this change in policy first surfaced when a user, r/BitcoinXio, posted a video demonstrating how to gift a Reddit Gold membership to another user. It then came to their attention that the only accepted payment options remaining were PayPal and credit card.
They then initiated a discussion, asking whether others were able to access cryptocurrency payment options or not.
This discussion was soon followed by a Reddit post on March 23, 2018, in the /r/btc subreddit. A user opined that high transaction fees could have been a possible reason for Reddit withdrawing bitcoin payment support.
Initially, users willing to pay for the Gold membership would use Coinbase to buy bitcoin at which point they were charged a premium of 1.5 to three percent. Taking bitcoin’s volatility and price fluctuation into consideration, however, made it difficult to arrive at a constant price for the premium service.
Bitcoin transaction fees touched an average high of around $60 in December 2017 as recorded by bitinfocharts.com. Users were forced to shell out exorbitant amounts of fees despite the minuscule amounts being transferred.
Recently though, transaction fees have declined sharply, and their drop has been an ongoing trend throughout the first three months of 2018.
Coinbase Merchant Tools to Coinbase Commerce
Existing online retailers or merchants who used merchant tools to process bitcoin payments would thus have to migrate to Coinbase Commerce by May 31, 2018. Coinbase warned that existing users of merchant tools would no longer be able to use the service post-April 30, 2018.
Even though there remains an entire month before the cut-off date, it seems Reddit may have decided to redact the option ahead of time, much to the surprise of its users.
As of the time of publication, it is not completely clear whether the removal is temporary or long-term. If permanent though, all purchases of Reddit Gold will be tied to an individual’s identity, a significant problem for a platform that thrives on anonymity.
Another Reddit user r/emoney40, who is a moderator of several other subreddits, confirmed that the bitcoin payment option had indeed been removed. They also speculated that it was because of the change in Coinbase’s payment infrastructure.
While not giving any concrete evidence on the topic, r/emoney40 stated that Reddit’s migration to Coinbase Commerce was something that was being looked at and discussed internally.
The final decision will likely be taken after gauging user interest as well as the success and adoption rates of the Coinbase Commerce program.
Reddit is hardly the first platform to stop accepting bitcoin payments. In late 2017, when the transaction fees were a major problem for the cryptocurrency, Steam also announced that it would be discontinuing bitcoin-enabled payments.