First Major Company to Support Bitcoin Payments Throws in the Towel

Mish

Bitcoin is too slow and costs too much to use in transactions. Why bother?

Stripe, the first major company to support bitcoin payments, announced today it will Ditch Bitcoin Support.

Stripe, the firm which helps more than 100,000 businesses do financial transactions online, is to scrap support for Bitcoin payments.

It said Bitcoin users now saw the virtual currency largely as an "asset" to be traded, rather than something to make payments with. Fewer online merchants wanted to accept the cryptocurrency, it added. Rising fees and longer transaction times as a result of price fluctuations also lessened its appeal, Stripe said.

In 2014, it became the first major payments company to support Bitcoin payments. At the time Stripe said it hoped Bitcoin would become a way for people in places with low credit card penetration or prohibitively high credit card fees to do transactions online. But the virtual currency was now "better-suited to being an asset than being a means of exchange," it said.

Stripe Blog

The Stripe Blog has more details on Why Stripe is Ending Bitcoin Support.

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.

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.

Therefore, starting today, 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.

Despite this, we remain 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. We’re interested in what’s happening with 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.

How to Buy a Pizza Not

In the above video, The Wall Street Journal attempted to use Bitcoin in the real world to buy things. They ordered a Pizza. It took 4 hours to confirm the transaction and the fee was $76.

Bitcoin has zero use as a transaction currency. It's only use is speculation.

Mike "Mish" Shedlock

Comments (12)
No. 1-12
Top-GUN
Top-GUN

There's a relatively new app out called Zelle for transferring money. I have very little experience with it but note several banks are cooperating with its use including BB&T and Wells Fargo.

KidHorn
KidHorn

Uh, I guess no one thought this through.

Blacklisted
Blacklisted

Dah! Why do you think Lite Coin, Lightening, and more efficient coins were developed? One used to also have to dial-in to get on the internet.

ReadyKilowatt
ReadyKilowatt

This is the fundamental fight going on with the Bitcoin people today. Is it a cash replacement or an investment tool or what? It's tantamount to a religious war and like most things open source will end up with a lot of forking. Not that that's a bad thing, but it wouldn't be prudent to keep all your eggs in one crypto-basket for sure.

Carl_R
Carl_R

And this confirms what we've known all along: Bitcoin is not money. Money, by definition is a medium for exchange, something Bitcoin is not useful for. That doesn't mean Bitcoin doesn't have value. I'd consider it a "collectible", and as such it's value is determined by the usual laws of supply and demand, meaning that as long as there is demand for it, it will have value, and if the day comes when there is no demand for it, it won't.

Carl_R
Carl_R

And this confirms what we've known all along, that Bitcoin is not money. Money is, by definition, a medium for exchange. Bitcoin, rather, is a collectible, with it's value determined by the laws of supply and demand. As long as people want to collect and hold it, it has value. If that ceases, so does the value.

RonJ
RonJ

A $10 pizza for $76. And that is before the foreign tariff.

_aleph_
_aleph_

Funny, but I don't envision a line for $76, 4-hour old (cold) pizza. Maybe I just don't have enough imagination.

Ambrose_Bierce
Ambrose_Bierce

Duh, i take bitcoin in a transaction for a dollar and by the time I get to the bank its worth fifty cents.

richard tanner
richard tanner

I find it incredible that not one of the commenters has done a smidgen of research. Lightning Network anyone?

MtnMan
MtnMan

Bitcoin is adopting the lighting network soon which will be a game changer. Bitcoin is not the equivalent of dialup because it can be upgraded to cable or fiber at any time. Lots for people to learn in this space.


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