Stripe COO Explains Move Away From Bitcoin Payments 🚨 This article is 6 years old...
Stripe COO Explains Move Away From Bitcoin Payments
2 min read
Updated: Mar. 24, 2020 at 6:55 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Popular payments provider Stripe made waves in 2015 after announcing the acceptance of Bitcoin for its merchant network. However, in April 2018, the company ceased Bitcoin operations providing no clear reasons at the time.
Stripe COO Explains Move
On July 18, 2018, Stripe COO Claire Jackson disclosed why the company’s short-lived relationship with the pioneer cryptocurrency soured.
Speaking at Fortune’s Brainstorm conference, Johnson stated blockchain-based payment mechanisms, and Bitcoin, in particular, is overhyped, slow, and impractical.
She revealed the company faced trouble in December 2017 after Bitcoin transaction times infamously rose to over 90 minutes and a few days in some instances. The situation has not improved, she added, as confirmation times currently reach 60 minutes currently.
Stripe merchants were equally put-off by the digital currency, Johnson continued, noting the backlog was so severe at times that a second transaction was filed by merchants when price fluctuated wildly between purchase and payment time.
Cryptocurrency Use-Case Questioned
Johnson questioned if cryptocurrencies served any mainstream purpose in the retail sector, primarily when the current system works as intended. She further stated Bitcoin’s killer app is “ransomware,” presumably referring to the increasing attacks from cybercriminals who demand payment in cryptocurrencies after hacking a computer and holding their sensitive data as a hostage.
Besides singling out the transaction times of Bitcoin and other cryptocurrencies, Johnson’s assessment on the subject also called out blockchain technology – referring to the growing sector as “overhyped.”
The Stripe COO stated:
“I do think we’ve reached that jump the shark moment where you just say “da-da-da blockchain.” The SEC is rightfully stepping in to check a flood of scammy blockchain projects.
Johnson told conference attendees the technology replicates existing database frameworks and data management tools, which are rapidly advancing. She further predicted the technology will not make significant inroads for “at least a decade, if ever.”
While the COO’s thoughts on the matter may not reflect Stripe’s decision to decouple from Bitcoin, industry players remain optimistic about the digital currency and underlying technology.
Technology Firms Continue Cryptocurrency Push
IBM’s Vice President of Blockchain, Bridget Van Kralingen, stated in January 2018 the technology is being successfully utilized across three major domains – cross-border payments, supply chains, and identity verification.
Van Kralingen added the inherent immutability of blockchains creates a tamper-proof transactional model free of third-party interference, meaning the technology is already proving its mettle.
Besides, IBM backed a stablecoin project on July 17, 2018. Called Stronghold USD, the project is built on Stellar’s blockchain, another IBM-backed project. Prospective buyers can purchase the venture-backed token by depositing dollars with Nevada-based Prime Trust, the project’s banking partner, for claiming an equivalent amount of tokens.
Additionally, Mastercard was awarded a patent on July 17, 2018, to indigenously link fiat and cryptocurrency transactions. As reported by CryptoSlate, the payments company touts the plan to serve customer interest in cryptocurrencies and provide a gateway for those concerned about the security of existing digital token payment frameworks, in addition to speeding up the infamously slow transaction times.
