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Yesterday, Stripe announced that it would be halting support for Bitcoin on its payments platform.
Besides being just generally awesome as an entrepreneur’s tool, Stripe was a pioneer in 2014 when it started accepting Bitcoin as a means of payment for online transactions. Soon after, popular e-commerce WordPress plugin maker WooCommerce integrated it into its Stripe payment gateway, allowing any WordPress site running WooCommerce to accept Bitcoin.
Stripe processes >$20 billion in transaction volume every year. E-commerce sales are projected to reach $631 billion by 2020. This means Stripe has an incredible runway ahead of it as a transaction platform.
More importantly, Stripe is a belweather of anything payments related… As such choosing a cryptocurrency to use could cause it to skyrocket.
In the announcement, Tom Karlo, a Product Manager at Stripe, described the issue of Bitcoin’s volatility as one major problem in its use as a currency. However there were other issues in addition to just volatility. He mentioned:
- Transaction confirmation times.
Bitcoin’s price fluctuates wildly and transactions are relatively slow to confirm. This means that by the time an e-commerce customer has made a purchase, the price he or she paid may have changed. Also, as Bitcoins become more scarce, with fewer available in the blockchain to be mined, the fees associated with processing transactions have risen to a prohibitive level.
He also noted the familiar refrain that Bitcoin is more useful as a store of value than as a currency.
But he did mention some possible alternatives to Bitcoin that could work well for the Stripe platform…
What Other Cryptocurrencies Could Stripe Accept?
In his post Mr. Karlo mentioned several cryptocurrencies that Stripe is following.
- Stellar Lumens
- Bitcoin Cash
The announcement and mention of Stellar Lumens, which is still relatively inexpensive compared to the other cryptocurrencies he mentioned, such as Ether, Litecoin and Bitcoin Cash, perhaps caused it to displace Litecoin as the #6 cryptocurrency in terms of market cap.
More interestingly though is Mr. Karlo’s comment in the final sentence of this paragraph where he writes:
“And, of course, there’ll be more ideas and technologies in the years ahead.”
Hmm… Yes. My feeling is that Stripe will launch its own cryptocurrency. I don’t see any reason why, if there’s a good business case to be had, why Google, Apple, Amazon, Facebook, etc. would not simply launch their own cryptocurrencies.
Stellar is higher by 17% today to $0.57. Perhaps on the news of Stripe even mentioning it.