Stripe the card payments acquirer, specialising in online and mobile payments, have announced through Tom Karlo’s blog on their web-site, that, “we are winding down support for Bitcoin payments. Over the next three months we will work with affected Stripe users to ensure a smooth transition before we stop processing Bitcoin transactions on April 23, 2018.” This was almost inevitable given what has been happening to the Bitcoin platform and price.
Karlo explains that:
- at Stripe, we’ve long been excited about the possibilities of cryptocurrencies and the experimentation and innovation that’s come with them. In 2014, we became the first major payments company to support Bitcoin payments
- their 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.
However, 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, as:
- 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.)
- 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.
- Demand from customers to accept Bitcoin has decreased.
So it comes as no surprise that they announced their withdrawal from Bitcoin.
Future of crypto currencies
Despite this Karlo concludes his blog saying that, “Stripe remains very optimistic about cryptocurrencies overall. There are a lot of efforts that we view as promising and that we can certainly imagine enabling support for in the future.” He mentioned several cryptocurrency solutions that have promise and are monitoring how they progress:
- “Lightning and other proposals to enable faster payments.”
- OmiseGO is an ambitious and clever proposal; more broadly, Ethereum continues to spawn many high-potential projects.
- Stellar (to which we provided seed funding) if substantive use continues to grow.
- Bitcoin Cash, Litecoin, or another Bitcoin variant, will find a way to achieve significant popularity while keeping settlement times and transaction fees very low.”
He even said, probably covering himself, that, “Bitcoin itself may become viable for payments again in the future.”.
Distributed protocols have a future
Karlo finished by saying, “We will continue to pay close attention to the ecosystem and to look for opportunities to help our customers by adding support for cryptocurrencies and new distributed protocols in the future.”
CTMfile take: Distributed protocols and cryptocurrencies will come to payments, but not via Bitcoin. Chris Skinner, as always, sums up the situation beautifully, “According to Lagarde ((head of IMF), cryptocurrencies could play a future role in updating the IMF’s own internal currency, a reserve asset named the Special Drawing Right (SDR), and she believes it will deliver “massive disruptions”. She’s not the only saying this, but the question then is: what should central bankers do about it?” This is mind blowing and IT IS COMING.
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