Payment platform Stripe has announced that it is withdrawing support for bitcoin payments starting April 2018. The firm, which enables over a hundred thousand businesses across the world to do transactions online, attributed the move to bitcoin’s extreme volatility and long transaction time, among other factors.
Although a logical reason driven by bitcoin’s limitations as a currency, the move is likely to anger the easily-provoked crypto proponents.
Stripe said that most bitcoin users today see the highest-valued cryptocurrency in the world as an asset rather than something they can use for everyday purchases. Furthermore, the number of online merchants willing to accept bitcoin payments is also comparatively low today.
“Our hope was that Bitcoin could become a universal, decentralized substrate for online transactions and help our customers enable buyers in places that had less credit card penetration or use cases where credit card fees were prohibitive,” the company said in a blog post announcing the decision to end bitcoin support.
“Over the past year or two, as block size limits have been reached, Bitcoin has evolved to become better-suited to being an asset than being a means of exchange. [….] this has led to Bitcoin becoming less useful for payments,” it added.
Trouble in Paradise?
Early proponents of Bitcoin had claimed that it was only a matter of time till the cryptocurrency evolved into a universal communal ledger. However, the fault lines within its credibility as a means of payment for everyday transactions became apparent late last year as the coin started hitting one high after another in terms of fiat-equivalence.
It is tough to ignore the problems with bitcoin if you use it regularly. For one thing, on a bad day, it might take hours for the blockchain to register your transaction. That in itself is quite a disadvantage when you’re making a transaction.
But to make it even worse, the value of the cryptocurrency could swing heavily during that delay due to bitcoin’s extreme volatility. So by the time the transaction gets cleared, the payment received by the merchant might be significantly different from what you originally intended to pay.
Apart from that, the transaction fees have also increased substantially with the appreciation in the price of bitcoin. So that’s another issue people using the coin for everyday transactions have to face.
What about Other Cryptocurrencies?
Stripe has confirmed that it is winding down support for bitcoin payments immediately, adding that all transactions will come to a halt starting April 23, 2018. However, the company made it clear that its decision to end bitcoin support doesn’t necessarily mean that it is giving up on cryptocurrencies altogether.
Stripe’s product manager Tom Karlo said that the company saw potential in Lightning, a relatively new technology that enables users to create two-way channels which can be used to make multiple small transactions. He acknowledged that the company was evaluating other technologies that could pave the way for faster payment solutions.
“OmiseGO is an ambitious and clever proposal; more broadly, Ethereum continues to spawn many high-potential projects,” Karlo added.