Stripe To End Bitcoin Support Because It's 'Less Useful'

Stripe, a popular payment processing company, announced Tuesday that it will no longer offer support for Bitcoin payments, making it the latest major company to turn away from the popular cryptocurrency.

Stripe will continue to process Bitcoin transactions for the next three months but will officially end support for the cryptocurrency on April 23. The payment processor cited fees associated with Bitcoin and questionable decisions relating to how Bitcoin has been managed as its reason for dropping support.

In a blog post, Stripe Product Manager Tom Karlo explained the recent success of Bitcoin has been great for the cryptocurrency’s value but not harmful to its status as a method of payment. “Bitcoin has evolved to become better-suited to being an asset than being a means of exchange,” Karlo said.

Karlo attributes that change in status to a number of things, including decisions made by the Bitcoin community as the cryptocurrency has grown. While he said it’s “hard to quibble with the decisions that have been made” given the growth and success of Bitcoin, it still has lost some of its appeal as an actual currency.

Stripe was an early adopter with Bitcoin, becoming the first major payments comment to support the cryptocurrency back in 2014. At the time, the company saw potential in Bitcoin to become a “universal, decentralized substrate for online transactions” that could enable people in developing markets to make purchases without credit cards or other standard payment methods.

Instead, Bitcoin has seen the transaction fees associated with it skyrocket. According to tracking data from BitInfoCharts , the current average transaction fee sits at about $20. That fee can spike as high as $60 at times. Stripe cited transaction fees, which it says are now about as expensive as bank wires, as one of the primary reasons it is dropping Bitcoin.

One of the other reasons is the increased time it takes to confirm a transaction. According to Blockchain.info , there are more than 82,000 Bitcoin transactions waiting to be processed. Bitcoin’s blockchain infrastructure is capable of processing about eight transactions per second , but the popularity of the cryptocurrency has created a backlog of transactions.

According to Stripe’s Karlo, those increased transaction confirmation times have led to an increase in failure rates for transactions. “By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the ‘wrong’ amount,” Karlo wrote.

As a result of the increased fees and wait times, Stripe has reportedly seen interest in Bitcoin from customers decrease and revenues generated from Bitcoin have declined substantially. “Empirically, there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense,” the company said.

Stripe is not the first major company to turn away from Bitcoin. Microsoft recently announced that it would halt support for Bitcoin over concerns of the cyptocurrency’s stability and wild fluctuations in price. The company’s concerns echo those of Steam, a popular video game platform that ended support for Bitcoin last year because of "high fees and volatility."