Coinbase, a leading cryptocurrency exchange, has recently made the decision to eliminate support for native Bitcoin (BTC) and other UTXO (Unspent Transaction Output) coins from its payment platform for merchants, Coinbase Commerce. This move, announced by the company’s head of product, Lauren Dowling, has sparked discussions and raised concerns within the cryptocurrency community.
Background and decision
In a thread on social media platform X (formerly Twitter), Dowling explained that removing support for native Bitcoin and UTXO coins was driven by challenges in delivering recent updates on Coinbase Commerce’s EVM (Ethereum Virtual Machine) payment protocol for Bitcoin.
She highlighted the difficulties in implementing features such as on-chain payment enforcement and automatic conversion to stablecoins like USDC (USD Coin) without the support of smart contracts, which are inherent to Ethereum and not present in the Bitcoin blockchain.
With this change, merchants using Coinbase Commerce will no longer have the option to accept native Bitcoin and UTXO coins directly. However, shoppers can still use Bitcoin for payments if they hold an account with Coinbase.
The company’s CEO, Brian Armstrong, assured users that Coinbase is working on integrating the Lightning Network into its platform, potentially enabling Lightning payments for commerce in the future.
Community reaction and criticism
The decision to remove support for native Bitcoin has generated criticism from various cryptocurrency community members. Some users expressed concerns about the implications for Bitcoin adoption, questioning whether it is fair to assume that every customer can or would want to open a Coinbase account.
Critics argue that this move could hinder the broader acceptance and usage of Bitcoin for online transactions, particularly among those who prefer not to use centralized exchanges.
Coinbase acknowledges the importance of addressing scalability issues and reducing transaction fees and confirmation times to drive mainstream adoption of cryptocurrency payments.
Integrating the Lightning Network, a layer-two scaling solution for Bitcoin, is a step towards achieving this goal. By enabling faster and more cost-effective transactions, the Lightning Network could enhance the usability of Bitcoin for everyday payments and e-commerce transactions.
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