Why Payment Service Stripe May Have Just Killed Bitcoin's Original Purpose
The third company to part ways with the cryptocurrency.
Stripe — an Internet payment service startup that processes billions of dollars a year — has become the third high-profile company to stop accepting bitcoin as a means of payment.
Tom Karlo, a product manager at Stripe, announced in a blog post published on Tuesday that the company will begin winding down support for the cryptocurrency over the next three months until April 23, when it will completely stop processing transactions. The rationale for the move underlines just how far bitcoin has come from the problem it was originally intended to solve — and that bitcoin might no longer be able to solve it at all if the likes of Stripe are abandoning it.
Following other tech giants like Valve and Microsoft, the web service company stated that a large portion of its customers are no longer interested in accepting bitcoin because of its volatility, soaring prices, and high transaction fees. Stripe made it clear that it is parting ways with the world’s leading cryptocurrency because it simply isn’t convenient for their users, not because it wants to distance itself from digital currencies as a whole.
Stripe began supporting bitcoin payments in 2014. The company believed that the original idea behind the digital currency could greatly benefit Stripe users. As described in bitcoin’s original white paper, the idea was that “a purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
However, as the price of bitcoin ballooned and the the crypto craze spread, the fees and prices have reached the same kinds of costs as the very financial institutions bitcoin was meant to supplant.
“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,” Karlo writes in Stripe’s announcement.
This is the crux for why the payment service company is dropping bitcoin. The times for transactions to go through have skyrocketed, and transaction fees have risen to cost tens of dollars, which is just about as expensive as bank wires.
While bitcoin originally set out to circumvent the bureaucracy and fees that financial institutions are known for, the recent cryptocurrency boom has made it more similar to a bank than Satoshi Nakamoto would have ever thought.
While Stripe is breaking up with the top cryptocurrency, the company might support Stellar, a relatively new cryptocurrency that the company provided seed funding for.
As bitcoin’s soaring value moves it from currency of exchange to investment asset, that idea of peer-to-peer electronic cash feels even further away. And while Stripe hasn’t closed the door on bitcoin, it’s not hard to imagine the world’s biggest cryptocurrency will just slowly but inexorably move away from payments for good.