Huge Payment Processor Stripe Is Bailing On Bitcoin


Silicon Valley's dream of a stateless digital currency for payments goes back to the early days of internet entrepreneurship, just before the turn of the century: Peter Thiel has said PayPal, the highly successful payment company he co-founded, fell short when it comes creating the "new world currency" it once envisioned.

"Of course, there'll be more ideas and technologies in the years ahead".

Stripe, the online payments startup used by more than 100,000 businesses worldwide, this week ended support for bitcoin because the time to complete transactions with the digital currency has increased along with fees, per a company blog post. Transaction times have become so long that making payments in Bitcoin simply isn't feasible any more for many: "By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it's for the "wrong" amount", explains Karlo. The fees associated with Bitcoin transactions have risen too and now challenge those usurious bank wire fees.

"Huge swings in price make the flawless case for not using Bitcoin as a method of payment", said Daniele Bianchi, a finance professor at Warwick Business School and cryptocurrency researcher.

"Because of this, we've seen the desire from our customers to accept Bitcoin decrease", stated Tom Karlo from Stripe. After all, Stripe mentions that it's because their clients (i.e. the businesses) no longer get much profit from using Bitcoin as a payment method hence this resolution.

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Another reason is that Bitcoin's price volatility makes it less than ideal as a means of payment. Stripe now powers businesses in 25 countries.

So on Tuesday, Stripe argued that it was ending support for bitcoin.

Stripe seemed to take care to paint the overall bitcoin project as a victim of its own success rather than imply that cryptocurrency is dead. "Over the next three months we will work with affected Stripe users to ensure a smooth transition before we stop processing Bitcoin transactions on 23 April, 2018".

However, the future doesn't look that gloomy for all the rest of cryptocurrencies Stripe is operating with. The announcement also indicated an interest in Lightning network, which is under testing and development, and a mentioned Stellar (the company behind Lumens (XLM)) as a possible candidate for future support. Gaming platform Steam announced a year ago that they would stop taking payments in Bitcoin due to the high transaction fees involved.