Payment processor Stripe ends support for Bitcoin, citing high fees and slow confirmations.
Stripe, the mobile payment processor with a $9 bln valuation, has announced that it is officially winding down its Bitcoin integration. Over the next three months, Stripe customers will be encouraged to migrate away from Bitcoin payments. After that, Bitcoin will no longer be accepted at all.
Stripe made waves in 2015 when it fully integrated Bitcoin, allowing all vendors who use the platform to accept Bitcoin payments. Many saw this as a sign of impending mainstream acceptance of Bitcoin as a payment method, but high fees and slow transaction confirmations have hobbled the network.
In a blog post, Stripe noted the high hopes the company had for Bitcoin when it first integrated the currency into its platform:
“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.”
Stripe cites slow confirmation times and high fees as the reason for its abandonment of Bitcoin as a payment method:
“This has led to Bitcoin becoming less useful for payments, however. Transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies. (By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the “wrong” amount.) Furthermore, fees have risen a great deal. For a regular Bitcoin transaction, a fee of tens of U.S. dollars is common, making Bitcoin transactions about as expensive as bank wires.”
Bitcoin as an asset
Stripe remains optimistic about cryptocurrency as a whole, but the company sees Bitcoin as more of an asset than a payment network:
“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. Given the overall success that the Bitcoin community has achieved, it’s hard to quibble with the decisions that have been made along the way. (And we’re certainly happy to see any novel, ambitious project do so well.)”
The company’s comments echo those of others in the digital currency space, such as Max Keiser, who see Bitcoin as a sort of “Gold 2.0” rather than a medium of exchange:
“[The digital currency] Dash is emerging as the crypto payment rail while Bitcoin asserts itself as Gold 2.0. I suggest those frustrated by the Bitcoin scaling debate to embrace Dash for payments and leave Bitcoin Core alone to continue working on Gold 2.0.”
Enter the altcoins
While Keiser cites Dash as a more viable payment network than Bitcoin, Stripe cites several other currencies as contenders:
“OmiseGO is an ambitious and clever proposal; more broadly, Ethereum continues to spawn many high-potential projects. We may add support for Stellar (to which we provided seed funding) if substantive use continues to grow. It’s possible that Bitcoin Cash, Litecoin, or another Bitcoin variant, will find a way to achieve significant popularity while keeping settlement times and transaction fees very low.”
Notably, the company has no plans to integrate any of those supposedly “better” currencies into its platform.
Stripe has left itself open to reconsider Bitcoin as a payment method in the future:
“We’re interested in what’s happening with Lightning and other proposals to enable faster payments…Bitcoin itself may become viable for payments again in the future.”
With the slow uptake of Segregated Witness and the effective death of plans to increase Bitcoin’s blocksize, all eyes turn to the Lightning Network to make Bitcoin viable again for payments. The Lightning Network has been under development for quite awhile, and there are several competing implementations. None of them are considered to be safe or suitable for general use, however. With Stripe, Steam and others ending their acceptance of Bitcoin payments, it’s clear that if the currency is to be considered a viable network for payments, lightning better strike soon.