Cryptocurrency

Tarsnap, the privacy-oriented backup service announced today in an email from its founder that it would be suspending the ability to pay for its services using Bitcoin. The decision was made by Tarsnap on Tuesday.

‘The final straw came on Tuesday when Stripe (which Tarsnap uses for both credit card and Bitcoin payments) announced that they were going to cease their support for Bitcoin , due to exactly the same problems as I noticed…’

With Stripe citing high transaction fees and volatility as the reason for its decision. Tarsnap is not the first company to stop accepting Bitcoin based on these reasons. It is the continuation of a trend started by Steam and Microsoft (though Microsoft has since reversed its decision). The email stated that Tarsnap will cease accepting Bitcoin payments on April 1st. Tarsnap chose the date presumably to allow customers using Bitcoin to secure other means of payment.

Tarsnap’s future plans

The email went further to state that Tarsnap intends looking into other cryptocurrencies for payment. Specifically referencing wanting Stripe to support them. And indicating a want for currencies not based on proof of work. The email links to a Stripe announcement where it is mentioned that Stripe is looking at the Lightning Network, OmiseGO, Ethereum, and Stellar. With a comment towards Bitcoin Cash, Litecoin, and other ‘Bitcoin variants’ as a possible solution as well.

End of Bitcoin as a payment option?

Tarsnap’s decision is one of a few made in recent months that paint Bitcoin used as a payment mechanism in a bad light. The idea that Bitcoin is more of a commodity than a currency is not a new one. Though it’s not an idea that has completely taken hold (yet?). If this trend continues, Bitcoin may find itself left behind as other cryptocurrencies take the lead in usability and adoption. Though only time will tell what lies in Bitcoin’s future.

stripe

Payment processor Stripe has announced that it will end support for bitcoin payments in April, citing rising transaction fees and confirmation times, as well as a decline in bitcoin revenues from businesses that currently use Stripe to accept cryptocurrency payments.

“Our hope was that Bitcoin could become a universal, decentralized substrate for online transactions and help our customers enable buyers in places that had less credit card penetration or use cases where credit card fees were prohibitive,” wrote Stripe’s Tom Karlo in a blog post.

However, Karlo notes that bitcoin has largely evolved from a currency into an asset since the company began processing bitcoin payments in 2014.

“Given the overall success that the Bitcoin community has achieved, it’s hard to quibble with the decisions that have been made along the way,” he said, but he noted that bitcoin’s evolution has resulted in a marked decline in its utility for everyday payments.

The company specifically pointed to bitcoin’s rising median transaction fee, which peaked as high as $34 in mid-December. Karlo said that transaction confirmation times have also become an issue, as the bitcoin price often fluctuates dramatically before the network processes the payment.

Effective immediately, Stripe will begin winding down its support for bitcoin, although businesses that currently accept bitcoin through the company can continue to do so until April 23.

Stripe is not the first mainstream company to rescind support for bitcoin due to its evolution from a currency into an asset. Video game retailer Steam recently stopped accepting bitcoin payments, and Microsoft briefly did as well, but the tech giant later reversed its stance.

Although Stripe is ending support for bitcoin, Karlo stressed that the company is still “very optimistic about cryptocurrencies overall,” particularly the Lightning Network, Ethereum, and OmiseGO.

He also said that the company may add support for stellar, a project to which Stripe contributed seed funding, and he added that the firm “can certainly imagine enabling support” for cryptocurrencies in the future.”

“It’s possible that Bitcoin Cash, Litecoin, or another Bitcoin variant, will find a way to achieve significant popularity while keeping settlement times and transaction fees very low,” he concluded. “Bitcoin itself may become viable for payments again in the future. And, of course, there’ll be more ideas and technologies in the years ahead.”