Microsoft re-enables Bitcoin payments, transaction fees and stability become big issues

This week, Microsoft stopped accepting Bitcoin payments due to unstable Bitcoin transactions, which also attracted speculation from the Bitcoin community. Recently, Microsoft has resumed accepting Bitcoin payments.

The software giant has allowed users to add Bitcoin funds to their Microsoft accounts and use them to pay for software since 2014, but has suspended Bitcoin payments twice in the past, once in 2015 and again in 2016.

This week, Microsoft once again suspended its acceptance of Bitcoin payments due to the instability of Bitcoin transactions. On Thursday, a Microsoft spokesperson confirmed to news.com.au that the company has now resumed its Bitcoin payment service.

“We have reinstated the bitcoin payment option after we ensured customers could redeem lower amounts of bitcoin.”

However, the soaring transaction fees and long transaction waiting times of Bitcoin have made the user experience of the Bitcoin network increasingly worse. Currently, the processing speed of the Bitcoin network is about 4 transactions per second.

Bitcoin users can choose to add a transaction fee to their transactions. The higher the fee, the more likely it is that the transaction will be included by miners, thus relatively ensuring the speed at which the transaction is accepted.

As more investors flock to Bitcoin, competition for each Bitcoin block has pushed up the average transaction fee, forcing users to choose between paying the price or waiting time.

As one Reddit user complained, “Bitcoin transaction fees are too high.”

Some competing cryptocurrencies, including Ethereum, Ripple, and the more controversial Bitcoin Cash (BCH), offer lower transaction fees and transaction waiting times. As the market develops, Bitcoin's share of the digital currency market is getting smaller and smaller, falling from 87% a year ago to 36% today.

In December, video game platform company Valve said it would no longer accept Bitcoin payments on its Steam platform due to the currency's high transaction fees and high volatility.

“Transaction fees on the Bitcoin network have skyrocketed this year, approaching $20 per transaction last week (from around 20 cents when we initially launched Bitcoin),” the company said in a statement.

“Unfortunately, Valve has no control over Bitcoin transaction fees, which make it unreasonably expensive to purchase games on the platform with Bitcoin. High transaction fees are even more problematic when the value of Bitcoin itself is plummeting.”

In 2017, the price of Bitcoin soared, from $1,000 at the beginning of the year to about $15,000 today. Its volatility is also very significant, with the highest single-day fluctuation reaching 30%.

“This caused issues for customers trying to purchase games with Bitcoin,” Valve said in a statement last month.

What do you think about Microsoft's re-acceptance of Bitcoin?