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Bitcoin Payment Problems

In recent times, Bitcoin payments have suffered three major blows;

  • Our payment provider now requires customer’s wallets to use a Bitcoin Payment Protocol, while some wallets are simply not compatible,
  • Transaction confirmation times have increased, and then increased some more, both inconveniencing our users and increasing the underpay/overpay problem,
  • Transaction fees have gone through the roof, making the use of Bitcoin less and less attractive, especially for smaller transactions.

Obviously, this is causing some of our customers some grief. Some of the customers that choose to want to use Bitcoin payments exclusively will actually use profanity in expressing their frustration over these changes, but our support staff does not deserve that. I, for one, will defend my staff and cause those customers to find themselves on the losing end of this “conversation”.

Contrary to popular belief, a merchant does not have control over the network’s transaction times nor fees. A merchant does not have control over the protocol requirements of one of the world’s largest Bitcoin payment services provider. A merchant does have control over payment providers. We could opt for a lesser widely adopted Bitcoin payment service provider if we wanted to. However, a merchant is not in the business of choosing payment service providers (and not all of them, by a long shot, offer a 1% payment settlement fee deal).

That being said, we already use Stripe for credit card payments … oh no, wait, Stripe is winding down its bitcoin support.

Some customers will state Bitcoin’s supposed anonymity is the primary reason for them to refuse the use of a credit card or bank transfer — but the incompatibility between their wallets and the payment protocol requirement prevents them from doing so. That’s a fine, but moot, argument. Supposed anonymity is not the same as privacy.

I say “supposed” because decentralized blockchain technologies provide a lot more information about who’s behind a wallet address than one might think. I say “anonymity” is not the same as “privacy” (nor vice-versa) because they are two fundamentally different concepts. I propose to you I’ll have more on this later.