The deep reason behind Microsoft's suspension of Bitcoin payments

In the wave of digital currencies, Bitcoin is undoubtedly the most representative. Its decentralized nature and potential investment value have attracted the attention of countless people. However, the recent news that Microsoft announced that it would suspend the acceptance of Bitcoin payments has sparked widespread discussion. This decision not only disappointed many Bitcoin users, but also confused many industry insiders who pay attention to the development of digital currencies. What exactly prompted Microsoft to make such a major decision? Next, we will explore this topic in depth from multiple angles.

First, we need to understand the basic characteristics of Bitcoin. Bitcoin is a digital currency based on blockchain technology. Its transaction process is decentralized, which means it does not rely on any central bank or financial institution. Since the supply of Bitcoin is limited, with only 21 million pieces, its value is affected by scarcity, which is one of the reasons why many people invest in Bitcoin. However, it is precisely because of this characteristic that the price of Bitcoin fluctuates greatly and may rise or fall sharply in a short period of time, which brings great risks to merchants.

In its announcement of suspending Bitcoin payments, Microsoft mentioned that it was mainly due to the volatility of Bitcoin transactions and high transaction fees. According to data, the price of Bitcoin rose nearly 20 times in just a few months in 2017, and then experienced a sharp correction in 2018. This price instability makes merchants face great uncertainty when accepting Bitcoin payments. For example, a store may lose tens of dollars in revenue in just a few minutes when accepting Bitcoin payments, which is an unbearable burden for any business.

In addition, Bitcoin transaction fees are also an issue that cannot be ignored. During busy network hours, Bitcoin transaction fees may rise sharply, even reaching tens of dollars. This makes some small transactions no longer cost-effective. For example, if a user buys an item worth $10, but has to pay a transaction fee of $30, this is obviously unreasonable. As a world-renowned technology company, Microsoft naturally wants to provide users with the best payment experience, and high transaction fees are obviously contrary to this goal.

Furthermore, Microsoft's suspension of Bitcoin payments may also be related to its concern for sustainable development. The Bitcoin mining process consumes a lot of energy. Many studies have shown that the electricity consumption required for Bitcoin mining is close to the total electricity consumption of some countries, which has caused great pressure on the environment. Globally, more and more companies are beginning to pay attention to sustainable development and strive to reduce carbon emissions. Microsoft, as a technology giant, is also actively exploring this field. Suspending Bitcoin payments may be part of Microsoft's efforts to achieve sustainable development goals.

In addition, the regulatory environment of the market is also constantly changing. As digital currencies become more popular, governments around the world are gradually increasing their regulatory efforts, and many countries are beginning to strictly review and manage digital currency transactions. This regulatory uncertainty makes many companies feel uneasy when using Bitcoin for transactions. As a multinational company, Microsoft naturally needs to take into account the laws and regulations of different countries and regions, so it will be more cautious in choosing payment methods.

It is worth noting that Microsoft has not completely given up on the possibility of digital currency. On the contrary, Microsoft's exploration in the field of blockchain technology and digital currency has not stopped. In recent years, Microsoft has launched Azure Blockchain Service to help enterprises build and manage blockchain applications. This shows that Microsoft still has confidence in blockchain technology and hopes to continue to deepen its presence in this field.

From an industry perspective, Microsoft's decision may also have a certain impact on other companies. When considering whether to accept Bitcoin payments, many companies often refer to the practices of other companies in the industry. If Microsoft, as an industry leader, chooses to suspend Bitcoin payments, other companies may follow suit, further affecting the market acceptance of Bitcoin.

In this context, we can also see that although Bitcoin has experienced rapid development in the past few years, challenges in its practical application still exist. Many merchants must weigh the potential risks and benefits when considering accepting Bitcoin payments. For some small businesses, accepting Bitcoin payments may bring more trouble than convenience.

Of course, Microsoft's decision has also triggered strong opposition from Bitcoin supporters. They believe that digital currency is the trend of the future, and Microsoft's move may hinder the popularity and development of digital currency. Supporters pointed out that although Bitcoin has high transaction fees and high volatility, this does not mean that Bitcoin itself has no value. On the contrary, with the advancement of technology, many problems may be solved, such as reducing transaction fees and increasing transaction speeds through second-layer solutions.

In my opinion, I think Microsoft's decision is a complex trade-off. As a technology company, Microsoft needs to find a balance between innovation and risk. Although Bitcoin has great potential, in the current market environment, many companies may choose a more stable payment method. With the continuous advancement of blockchain technology, the application scenarios of digital currency will continue to expand in the future. Perhaps in the near future, we will see more companies regain their confidence in Bitcoin.

In general, Microsoft's decision to suspend Bitcoin payments reflects the complexity of the current digital currency market. Although Bitcoin, as an emerging payment method, still faces many challenges, the technical potential and market demand behind it cannot be underestimated. We expect that in the future, with the joint efforts of technological progress and market supervision, digital currencies will usher in a broader development space and bring new vitality to the global economy.

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Microsoft no longer supports Bitcoin as a payment method for purchasing its products, according to technology website Bleeping Computer.
A Microsoft support employee said that the reason for their decision was due to the unstable state of Bitcoin, and that this move was only temporary. Microsoft began accepting Bitcoin payments in 2014 and has suspended this option several times in the past.


HIGH BITCOIN FEES
Last December, Steam also chose to stop supporting Bitcoin transactions for similar reasons. Steam cited “high fees and volatility” as the reasons for their decision.
Transaction fees have increased from a few cents a few years ago to dozens of dollars recently, and Bitcoin has become almost difficult to use for small transactions. Many people need to pay a large portion of the transaction amount as fees.
The volatility of Bitcoin prices is also a problem for companies like Microsoft and Steam, as a sudden and unforeseen drop could result in huge losses.
Microsoft does not allow users to purchase products directly with Bitcoin, but instead asks them to add a certain amount of US dollars to their accounts in advance, and this money will be used as Bitcoin payment.
However, such transfers are still subject to transaction fees, and Microsoft still risks losing the Bitcoin funds in its accounts, which is a problem that any financial sector needs to face.


BITCOIN PRICE VOLATILITY
Although Bitcoin prices have always been volatile, they have never been as volatile as they have been in the past three months. To be accepted in the financial sector, both digital currencies and legal currencies need to have a certain degree of stability, and Bitcoin does not currently have such a feature.
At the same time, Microsoft also recommends that customers choose other payment methods, such as credit cards, debit cards, etc.
In addition, Visa recently terminated its agreement with prepaid card issuer WaveCrest, resulting in the unavailability of Bitcoin debit cards from companies such as Bitwala, BitPay, and Cryptopay.