Payment processor Stripe announced Tuesday that it will end supporting bitcoin on April 23rd, citing bitcoin’s volatility and long transaction time.
There are undoubtedly a lot of issues associated with Bitcoin transactions that cannot be denied. Firstly, the process of entering a transfer in the bitcoin blockchain takes hours and secondly, when a transaction is finally completed, the transferred bitcoins do not have the same value as they had before the transaction, because of their continuously altering prices. With the increase in Bitcoin price, the transaction fees have also increased considerably.
“By the time the transaction is confirmed, fluctuations in bitcoin price mean that it’s for the ‘wrong’ amount,” wrote Stripe product manager Tom Carlo in a blog post. “For a regular bitcoin transaction, a fee of tens of U.S. dollars is common, making bitcoin transactions about as expensive as bank wires.”
These issues badly affect Stripe’s merchants and users who therefore have limited the use of bitcoin.
“Because of this, we’ve seen the desire from our customers to accept Bitcoin decrease. And of the businesses that are accepting Bitcoin on Stripe, we’ve seen their revenues from Bitcoin decline substantially. Empirically, there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense,” wrote Karlo.
Stripe first started taking bitcoin in 2015, a year after the platform started testing the technology in 2014. At that time a single bitcoin was valued at $1000 and the cryptocurrency was gaining popularity rapidly. People from around 60 countries were able to pay merchants using bitcoin on Stripe’s network.
Karlo said that while Stripe will no longer take bitcoin, the company remains “very optimistic about cryptocurrencies overall” like Lightning, OmiseGO, Ethereum, Bitcoin Cash, Litecoin.
Karlo also mentioned that Stripe may add support for Stellar Lumen (XLM), the currency of Stellar, in which Stripe holds a stake.
“We may add support for Stellar (to which we provided seed funding) if substantive use continues to grow,” he wrote.
In 2014, Stellar Development Foundation received a loan of $300,000 from Stripe which was repaid with 2 billion Stellar lumens. Stripe currently owns about 2 percent of the existing XLM worth around $178 million.