In an unexpected move on February 18, Coinbase Commerce, the payment portal of the popular cryptocurrency exchange Coinbase, drops native Bitcoin payments. Lauren Dowling, Coinbase’s Head of Product, revealed the decision to the exchange’s massive user base of 73 million, characterizing it as a “difficult decision” aimed at improving the payment portal.
The decision involves removing native Bitcoin, Litecoin, and other UTXO (Unspent Transaction Output) support from Coinbase Commerce. Dowling emphasized that the platform was created to streamline crypto payments by utilizing smart contracts and other tools from the Ethereum Virtual Machine (EVM). The objective was to facilitate on-chain commerce, eliminating operational and financial complexities associated with traditional systems.
Dowling clarified that despite the platform’s capabilities, Bitcoin posed challenges due to its incompatibility with the EVM-based payment protocol. Notably, Bitcoin lacks smart contracts and stablecoins on its network, making integration difficult within the current framework.
Difficult Decision Made Citing Challenges in EVM Payment Protocol Updates
In a recent development, Coinbase has decided to drop native Bitcoin payments and other UTXO (Unspent Transaction Output) coins from its payment platform designed for merchants, known as Coinbase Commerce. Lauren Dowling, the head of product at Coinbase, revealed the decision in a thread on social media platform X (formerly Twitter) on February 18.
According to Dowling, the company faced challenges in delivering recent updates on its EVM (Ethereum Virtual Machine) payment protocol for Bitcoin. The new Commerce product now enforces payment details on-chain, supporting a wide range of assets, both native and ERC-20 tokens. The platform automatically converts payments to USDC (USD Coin) on-chain at a guaranteed rate for merchants.
Dowling explained the decision, stating, “Delivering these same capabilities on the Bitcoin blockchain without smart contracts and stablecoins was challenging & we, therefore, made the difficult decision to remove native Bitcoin & other UTXO support.”
User Impact and Future Integration
While merchants using Coinbase Commerce will no longer have native Bitcoin and UTXO coin support, shoppers can still use Bitcoin if they have a Coinbase account. Coinbase CEO Brian Armstrong assured users that the company is actively working on integrating the Lightning Network into Coinbase. The Lightning Network, a payment protocol for Bitcoin, has been in operation since 2017.
Armstrong expressed optimism about the future, saying, “Hopefully there are opportunities to make commerce payments with Lightning in the future.” He highlighted the need to move towards layer 2 solutions to reduce transaction fees and confirmation times for crypto payments to become mainstream.
Community Criticism and Concerns
The decision to remove native Bitcoin support has sparked criticism within the crypto community, with users expressing concerns about its potential impact on Bitcoin adoption. Some users pointed out the assumption that every customer is in the U.S. and has a Coinbase account, raising questions about inclusivity and accessibility.
The move also limits payments from self-custody wallets and third-party exchanges, prompting users to question Coinbase’s commitment to the broader crypto community. Social media platforms witnessed discussions on the implications of such decisions for the decentralized ethos of cryptocurrencies.
As Coinbase Commerce drops native Bitcoin payments, the decision to remove native Bitcoin and UTXO coin support reflects the challenges associated with integrating these assets within the current framework. While the company aims to enhance its capabilities, user concerns highlight the importance of addressing inclusivity and accessibility in the evolving landscape of cryptocurrency payments. As the crypto space continues to evolve, striking a balance between innovation and user-friendly solutions remains a crucial aspect of the broader adoption of digital currencies.
Also Read: Coinbase Stock Jumps: Big Earnings Boost Sparks Investor Excitement.
