Sunday, June 16, 2024

    Online Payments Company Stripe drops Bitcoin

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    Internet commerce company Stripe has created a stir in the crypto markets today. The Irish online payments firm has ended support for Bitcoin and is eyeing new contenders. It is a significant move for Stripe which was the first major payments company to support Bitcoin back in 2014.

    According to reports Stripe will stop accepting Bitcoin payments as of April 23. The company cited network congestion, increasing transfer costs, and lengthening processing times as the primary reasons for ditching BTC. Bitcoin remains one of the slowest and inefficient cryptocurrencies on the market at the moment. Without serious upgrades such as the Lightning Network internet payments companies will start seeking alternatives.

    Slow and expensive

    On a company blog post it was stated that Bitcoin had become better suited as an asset than a means of exchange. It also claimed that price volatility had led to an increase in the failure rate of transactions denominated in fiat currencies. By the time the transaction had been confirmed it was often for the wrong amount as the price of BTC had changed again and transfers are not possible in real-time.

    Rising fees were also blamed for the divorce with the king of crypto. Stripe’s product manager, Tom Karlo, went on to say;

    “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.”

    Enter the alternatives

    The online payments processor will need an alternative cryptocurrency to facilitate payments and it is already looking at Stellar Lumens and OmiseGO. Karlo went on to state;

    “OmiseGO is an ambitious and clever proposal; more broadly, Ethereum continues to spawn many high-potential projects. We may add support for Stellar (to which we provided seed funding) if substantive use continues to grow.”

    The blog post mentioned a few other altcoins such as Litecoin, Bitcoin Cash, and ‘other Bitcoin variants’. The effect on both XLM and OMG was positive. Lumens reached a weekly all-time high of $0.63 a few hours ago, up over 14% on the day. It has reached sixth position in the market capacity charts with $10.8 billion at the time of writing. OmiseGO gained almost 12% on the day reaching $19.02 a few hours ago. The altcoin is not as volatile as some of its brethren and has shown a steady increase of over 230% over the past three months.

    Stripe currently powers online transactions for over 100,000 global businesses and private individuals. Whichever cryptocurrency they choose is likely to enjoy some positive chart action.

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