Bitcoin falls out of favour as a payment method

Reddit is the latest company to drop Bitcoin as a payment option, following similar moves by platforms like Steam and Stripe.

A Reddit administrator explained that an upcoming Coinbase change, combined with bugs in the Bitcoin payment option that were affecting purchases, led them to this decision.

In December, Steam said it will no longer support Bitcoin as a payment method due to high fees and volatility in its value.

“In the past few months, we’ve seen an increase in the volatility in the value of Bitcoin and a significant increase in the fees to process transactions on the Bitcoin network,” said Steam.

In January, Stripe announced it was winding down its support for Bitcoin payments, also due to the high costs and slow transaction times.

Stripe is an online payments platform which makes it easy to accept payments online and in mobile apps.

Stripe was one of the first major payments companies to support Bitcoin.

The company said transaction confirmation times had risen substantially, which led to an increase in the failure rate of transactions.

Prohibitive and expensive

With Reddit dumping Bitcoin, it is substantiating the argument that Bitcoin is failing as a payment method.

Merrill Lynch analysts highlighted that the time and cost of Bitcoin transactions are prohibitive, and hurt the cryptocurrency’s suitability as a payment method.

They added that Bitcoin should be seen as a good proof-of-concept for “the blockchain”, which has great potential.

“However, so far it looks to have not made much headway in its obvious agenda, to provide a purely peer-to-peer version of electronic cash,” said the Merrill Lynch analysts.

Bitcoin’s major drop in value since December 2017 may also be contributing to the hesitance to use it as a payment method, as stability is key to giving consumers confidence when they transact.

The developers working on the Bitcoin blockchain are looking to combat this, however, and recently introduced the Lightning Network software.

The Lightning Network went live in March, and is aimed at making cryptocurrency payments faster and cheaper.

It does this by allowing Bitcoin users to open payment channels between each other, and not needing to post immediately on the blockchain.

Now read: Bitcoin, Ethereum, and major cryptocurrencies are at serious lows for 2018

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Bitcoin falls out of favour as a payment method