BitPay, a cryptocurrency payment service founded in 2011, may have to change its platform as the Bitcoin Core developers seek to remove the BIP70 standard. With the proposal being publicly available in March 2019 for the first time, the core developers of Bitcoin actively sought to remove the payment address format which is still used by BitPay.
Now that the Bitcoin Core 0.19.0 client is soon to be released, developers have discussed on their GitHub page the possibility of disabling BIP70, and even removing it entirely in a newer version.
A significant number of crypto wallets and payment services use the BIP21 standard, which was first introduced in 2016. However, the Atlanta-based payment processor did not follow the transition, which may leave BitPay with no developer support.
BitPay’s decision not to change is format led to several users stop using the company’s services, as some cryptocurrency wallets did not support invoices created by BitPay. The payment processor managed to solve the problem for a short time by introducing a feature where users can choose not to use the BIP70 standard, but it was removed after a later date.
The loss of support for the BIP70 standard can be contributed to the fact that the protocol relies on centralized technology, and that it allows Bitcoin merchants to implement AML (Anti-Money Laundering) and KYC (Know-Your-Customer) mechanisms into their transactions. Naturally, the Bitcoin community chose the more secure, decentralized, and anonymous BIP21 standard.
Commented by a Bitcoin core developer who goes by the name ‘Luke-jr’, he stated that merchants no longer use BIP70 and that the standard’s implementation is ‘broken’ and does not work with the Core client.
BitPay nevertheless stands by its decision to continue the use of BIP70, creating several blogposts that defended their stance. In a blog post published on January 2018, the company described dramatically reduced payment errors and decreased miner fees as the main reasons behind their adoption of BIP70.
With a badly created PR campaign, the payment platform faced severe criticism from both the crypto community and other platforms as well. Additionally, recent controversy regarding BitPay blocking donations to Hong Kong news platform Hong Kong Free Press (HKFP), resulted in HKFP’s CEO completely destroying BitPay’s reputation. Similarly, a $100,000 donation to the Amazon rainforest fires via BitPay was also blocked for unknown reasons.
As BitPay deals with calls for boycotts, controversial business decisions and now even the possibility of not being able to run its platform with the development of Bitcoin Core, the platform’s fate does not seem optimistic.
Other alternatives such as BTCPay, an open-source payment processor rival, are rapidly growing, with the project receiving a $100,000 grant from Square Crypto. As a crypto arm of Square, the mobile payment firm, Square Crypto announced their grant and support via Twitter on 14 September.
In their announcement, the firm stated that BTCPay can use the funds for anything, as long as the money is used for keeping their software open-source and focuses on improving privacy, security, scalability, and user experience for Bitcoin.
As BitPay recently announced that they will introduce Ethereum payments on their platform, it seems that the company may be better off by focusing on making a protocol transition for their originally supported digital asset.