Is Bitcoin Dying as a Payment Option?
While it may be a hugely investable asset, Bitcoin is venturing further away from being a functional currency
About six months ago the news was littered with companies that were looking to integrate Bitcoin as a payment system. However, in the fast-paced cryptocurrency ecosystem, things have changed dramatically.
Now, there is a host of companies either turning away from Bitcoin or doing a full U-turn. Microsoft recently announced that after almost three years it would stop accepting Bitcoin. However, it did reserve that position after taking its own steps to: “ensure lower Bitcoin amounts would be redeemable by customers.”
Steam, the gaming platform, also canceled its use of Bitcoin as a payment system in early December last year. Their reasons resonated with the general consensus, citing high fees and incredible volatility as the main issues.
Slow and expensive
It has been a bone of contention with Bitcoin since its fees started averaging about $2, now with transactions costing upwards of $20, people have started looking at Bitcoin as something other than a digital currency.
The North American Bitcoin Conference said on its website that network congestion and manual processing influenced the decision to stop accepting payments in cryptocurrencies.
"We have, and always will, accept cryptocurrencies for our conferences, up to fourteen days before the event," the organizers wrote. "However, due to the manual inputting of data in our ticketing platforms when paid in cryptocurrencies, we decided to shut down Bitcoin payments for last minute sales due to print deadlines."
It would seem that it is possible to link Bitcoin’s change in categorization back to when SegWit2x failed to launch and thus sent Bitcoin on a monster rally that saw it end the year 13 times stronger than when it started.
Bitcoin was having problems defining itself as a digital currency, or as digital gold, and due to the nature of the cryptocurrency, it was defined democratically as SegWit2x was not taken up - for a number of reasons.
It was thought that SegWit2x would help lower costs and speed up the network; however, Bitcoin’s value as a store of value would probably take a hit.
And, with interest in Bitcoin being driven by the mainstream acceptance of the digital currency to be an asset that grew exponentially, it seemed that the community was keen to see it move towards being so-called digital gold.
The very fluid nature of Bitcoin’s evolution means that it could still become a very useful and viable currency if the community decides. The latest change that could be on the cards is the Lightning Network which would help hugely with Bitcoin scaling issue.
The Lightning Network would implement a smart contract script into the Bitcoin network that would open private payment channels between a peer and all of the other peers they transact with. In addition to all the private payment channels they are a part of, each of peer would have one channel open to the Bitcoin Blockchain.