The Stripe Strike: << Adios Bitcoin! >>
Stripe broke up with Bitcoin…but it is still loving decentralized technologies.
As reported in this official post Stripe has ended supporting bitcoin payments, an option provided since mid-2014. The webpage https://stripe.com/bitcoin is already gone. Unfortunately, this isn’t a good news for the Bitcoin ecosystem, but can the Stripe decision be criticized?
What the heck is Stripe?
For those who do not know, Stripe is a payment processor for online transactions (a very good one, in my opinion). A successful startup funded in 2010 by two Irish brothers, John and Patrick Collison that, by the end of 2016, was evaluated 9.2 billion $. Stripe could be considered a PayPal competitors. They are making business with VISA, Mastercard, SEPA, Sofort (just to say mention some EU name), dealing with SWIFT, PSD2 and helping anyone to process online payments (with an XXI century approach to UX, thank God!).
Mid 2014: Stripe supports Bitcoin transactions
Just this morning I read their post written at that time “Bitcoin: the Stripe perspective” and I was impressed by how they saw so much potential in Bitcoin technology. I mean, I did too, but Stripe is a payment processor working with traditional payment networks and it was openly criticizing them:
“any closed network will, by nature, be deprived of structural pressures that force it to improve”.
Indeed it is a good point and Stripe saw in cryptocurrencies the way to change this static behavior. Their interests on cryptocurrencies were about “a medium of exchange (a way to transport value)” but more specifically they were looking for an alternative way to support payments worldwide through an open standard that could be easily adopted by anyone without having to deal with “traditional payment systems” that, at that time, “look a lot like computer networks before the internet”. Mainly they were hoping to find an open financial ecosystem, a decentralized substrate for online transactions, that would allow moving money easily.
Let’s say that for a payment processor, struggling on connecting to many systems and standards in different countries, accessing a unique global ecosystem would definitely represent a major improvement. Bitcoin has been the first shot in their explorations.
Ending Bitcoin supports
Here is when Stripe decided to stop supporting Bitcoin inside its payment gateway. Well, reasons are pretty straightforward: confirmation time (now ~0–30 minutes), transactions fees (now ~6.13$ | 54,240 satoshi). I would also mention: few transactions per second, network congestion issues and the rise of speculative behaviors that have increased fluctuations, classic problems that we are now well aware of.
Empirically, there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense.
With the time “Bitcoin moved away” from its initial purpose: a peer-to-peer electronic cash system and paying in bitcoin is, right now, an inefficient way to exchange value (but it is still a good way to store it).
In the specific Bitcoin case everyone is expecting many things from the lightning.network project that would potentially allow the most famous cryptocurrency to rise again and be used in our daily life even for micro-payments.
Wait a moment…what about Stellar?
In mid-2014 Stripe funded Stellar with 3 million $.
Stellar is a project based on the open source implementation of Ripple and founded by Jed McCaleb (eDonkey2000, Mt-Gox, Ripple, Stellar).
Stellar is a hybrid blockchain that could be seen as a payment gateway able to transfer assets cross-border and exchange cryptos and fiat money through a built-in exchange. They are also providing a layer for integrations with third parties and anyone can access the stellar potentiality (IBM partnered up with Stellar in 2017). Of course one of the Stellar goals is to support real-time transactions (2–5 sec.) and nearly-zero transaction fees.
Isn’t this very similar to an implementation of what they were looking for? In fact, Stripe is mentioning that they could add support to Stellar (when and if more services will be provided by companies embracing it).
We may add support for Stellar (to which we provided seed funding) if substantive use continues to grow.
Conclusions
Stripe as a payments processor has always demonstrated a positive approach to cryptocurrencies and blockchain technologies. They’ve tried to lead the way embracing Bitcoin and becoming a real use-case in the“traditional” payment world. Now, will the Stripe/Bitcoin relation be remembered as a negative use case? I believe this is just a small stumble in the path for changing the payment world. Which project will lead this process still unknown but for sure Stripe will be ready to embrace the best candidate.
So, we will continue to pay close attention to the ecosystem and to look for opportunities to help our customers by adding support for cryptocurrencies and new distributed protocols in the future.
