eBay, the $39 billion e-commerce platform, is seriously considering integrating Bitcoin into its platform as a payment method. In an interview with Yahoo Finance, eBay Americas senior vice president Scott Cutler stated that eBay is “seriously considering” integrating Bitcoin.
Power of Bitcoin
Throughout the past 12 months, the stock price of Overstock has increased by over 130 percent, triggered by the company’s involvement in various Bitcoin and Blockchain technology ventures. Several major conglomerates such as Japan’s GMO have also experienced a rapid increase in their stock values subsequent to their integration of Bitcoin.
It has become increasingly challenging for large-scale conglomerates and financial service providers to dismiss Bitcoin, because of its exponential increase in value and user base. Currently, the total market valuation of Bitcoin and other cryptocurrencies exceeds $500 billion. As such, major banks like Goldman Sachs have started taking steps toward embracing the digital currency also, with Goldman agreeing to clear Bitcoin futures on behalf of their clients.
Cutler noted during the interview with Yahoo Finance “we’re not quite there yet.” Despite this, eBay is apparently demonstrating its optimism towards the digital currency. The company is also effectively showing the public that they are following the latest trends in finance.
High merchant fees
According to Bitcoin Fees, a transaction fee predictor on Earn.com, the fastest and cheapest transaction fee is currently 360 satoshis / byte or $13 per transaction. Granted, the transaction fee of Bitcoin depends on the size of the mempool. But, the size of the Bitcoin mempool has consistently remained above 110 million bytes over the past few days.
Moreover, casual users and newcomers will not continuously check the size of the Bitcoin mempool to come up with the optimal satoshis per byte-based fee to pay merchants on eBay. Without sufficient scaling and lower fees, users on eBay will likely not pay for items with a fee of over $10.
Already, Steam has temporarily disabled its integration of Bitcoin due to the increasing complaints about high fees from its clients. The merchant and e-commerce adoption rate of Bitcoin have slumped in regions outside of Japan.
Given the current state of the Bitcoin Blockchain, it is likely that e-commerce platforms like eBay will only integrate Bitcoin once secondary layer solutions are ready for integration, such as Lightning Network. It is important to note that second-layer scaling needs Segregated Witness (SegWit) to operate, and the adoption rate of SegWit remains below 10 percent.
The adoption rate of SegWit could increase by large margins in early 2018, upon the integration of SegWit by Coinbase and Blockchain.info, two of the global market’s largest Bitcoin wallet platforms.