Coinbase Ends Bitcoin Support! Disaster?
Coinbase Ends Bitcoin Support! In a recent announcement, leading cryptocurrency exchange Coinbase announced that it will remove support for native Bitcoin and other UTXO (Unspent Transaction Output) coins from its payment platform for vendors, Coinbase Commerce. As stated by the company’s product head Lauren Dowling, this decision is linked to the difficulties in providing the latest updates in the BTC (Bitcoin) EVM (Ethereum Virtual Machine) payment protocol.
In a string on social media platform X (formerly Twitter), Dowling explained, “The new Commerce product implements the details of each payment on-chain, supports hundreds of assets (native ones and ERC-20s), [and] automatically converts payments to USDC for merchants. It was challenging to offer the same capabilities on the Bitcoin blockchain without smart contracts and stablecoins, and hence we had to remove native Bitcoin and other UTXO support.”
This decision means that sellers using Coinbase Commerce will no longer be able to directly accept payments with Bitcoin and certain other UTXO coins. However, Coinbase CEO Brian Armstrong highlighted that buyers can still use Bitcoin for payments if they have an account with the exchange. Armstrong also expressed hope for future trade payments using the integration of the Lightning Network.
The Lightning Network, a second-layer protocol built on the Bitcoin blockchain, aims to increase scalability and provide faster and cheaper transactions. Armstrong stressed the importance of these kind of solutions for mainstream adoption, saying, “Overall, we do not think online shopping with cryptocurrencies will really go mainstream, we need to move away from layer 1 and lower transaction fees and confirmation times, so we are trying to accelerate the move towards this world.”
The UTXO model used by Bitcoin and its forks plays a significant role in the functionality of cryptocurrency, providing transparency and security in the transaction processing. This model is different from Ethereum ‘s account-based model, which offers more flexibility but can cause scalability challenges.
Despite the decision by Coinbase to remove native Bitcoin support, this decision has faced criticism within the community, especially in relation to its potential impact on Bitcoin adoption. Some users argue that relying solely on Coinbase accounts for Bitcoin transactions could limit accessibility and impede broader acceptance.
A user using a pseudonym compared the requirement to have a Coinbase account to the idea that all customers must bank with a specific institution to facilitate payments. This criticism highlights the importance of promoting an inclusive ecosystem that encompasses various preferences and modes of access.
As the cryptocurrency landscape continues to evolve, decisions like Coinbase’s removal of native Bitcoin support spark discussions on balance between innovation, usability, and decentralization. Despite ongoing challenges, ongoing efforts to increase scalability and accessibility are crucial for advancing the adoption of cryptocurrencies for daily transactions.
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