The bad news just keeps piling up for bitcoin.
Reddit, which was among the biggest platforms to allow bitcoin payments, has stopped accepting the cryptocurrency on its platform. According to news reports, users of the site can no longer use bitcoin to upgrade to Reddit Gold, a feature that enables them to block ads and highlight their comments. Payments using bitcoin on Reddit are made using San Francisco-based cryptocurrency exchange Coinbase’s wallet. (See also: How Reddit Makes Money).
A moderator on the site said they might enable bitcoin payments again if there is demand and based on progress of Coinbase Commerce, a service launched by North America’s largest cryptocurrency exchange to enable merchants to accept bitcoin. The moderator also said they’d observed bugs for payments made using bitcoin.
Reddit is the latest among large online platforms to shut its doors on cryptocurrencies. Facebook Inc. (FB), Twitter Inc. (TWTR), and Alphabet Inc. subsidiary Google (GOOG) have already banned ads related to cryptocurrency. This bit of news comes amidst a regulatory crackdown and a downward spiral in cryptocurrency prices.
How Does Reddit’s Decision Affect Bitcoin?
Reddit began accepting bitcoin back in 2013 to diversify payment options on the site. However, it has not revealed usage statistics for bitcoin payments on its site. At the time of the 2013 announcement, Coinbase had hoped that Reddit’s decision would kickstart mainstream adoption of bitcoin. While bitcoin has exploded in value since those days, mainstream adoption of the cryptocurrency remains a pipe dream.
There are a couple of reasons for this.
For starters, bitcoin’s transaction fees shot up last year on the back of a burst in trading volumes. The fees became high enough to make the original cryptocurrency unsustainable for daily transactions. (See also: Will Rising Bitcoin Transaction Fees Bring Down Bitcoin's Price?) The user interface for bitcoin payments has also not improved much. Average transaction time using the cryptocurrency is long and unwieldy. The ever-growing list of scandals and criminal activities associated with bitcoin also earned bitcoin a bad rep amongst regulators. While its use in daily transactions is not banned, bitcoin has been legalized as a virtual currency in very few countries. As a result, merchant and consumer adoption for bitcoin is still low.
Within this context, Reddit’s stance of observing Coinbase Commerce’s progress is understandable.
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