Stripe, which was the first payments company that made it possible to transact in Bitcoin, is about to stop support for payments in Bitcoin.
This move by the major payment company is reported as a reaction to change in the image of Bitcoin from being a “virtual currency” to being an “asset”, according to the blog of Tom Karlo, who serves as a Product manager at Stripe.
The purpose and application of Bitcoin have seen a complete revamp in the last 2 years. Bitcoin is now perceived by the people as an asset to be held for more significant returns in future, rather than the “Virtual Currency” it used to be.
According to the blog, Bitcoin’s appeal has nosedived a bit for the online merchants. Rise in transaction fees and volatile price fluctuations being the primary reason for the same.
Termed as “Expensive”, “cost-intensive” and ultimately “unlucrative”.
Stripe, which became the first major payments company in 2014 to allow Bitcoin payments, had hoped that Bitcoin would become an alternative option for the people frustrated with high-credit card fees. Some of their clients of Stripe are Lyft, Deliveroo, Grab and Target. The customers used to pay a certain fee each time they made a transaction in Bitcoin with Stripe.
But the magnanimous surge in Bitcoin prices and interest among the masses over the years has made the Bitcoin rates too volatile.
The product manager explained this step in-depth in their blog and said, “By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the ‘wrong’ amount.”
In order to make sure that the parties at both ends are satisfied, steps had to be taken which led to an increase in the time taken to complete a transaction.
These factors made the Bitcoin transaction fees as high as those for bank wires, which made the motive behind starting Bitcoin transactions quite redundant.
Not surrendering on Cryptocurrencies just yet!
Stripe will be stepping back from Bitcoin slowly and will stop the transactions completely by 23rd April. Stripe officials have gone on record to say that this move does not mean they are giving up on cryptocurrencies. They will be exploring different options for making transactions faster and cheaper.