Former Coinbase Business Developer: ‘There Wasn’t a Long-Term Case for Bitcoin Payments’
In a recent statement, former Coinbase business developer and marketing lead, Nick Tomaino, revealed that the idea of using bitcoin for payments gradually lost its relevance in the market. Tomaino explained that even though Coinbase raised $125 million in funding rounds in 2014 based on the premise of bitcoin payments, it became clear quickly that this would not be the main use case for the cryptocurrency in the long run.
Tomaino’s comments came in response to criticism of the user experience for small settlements using bitcoin and the Lightning Network. He shared that Coinbase had already learned about the limitations of bitcoin payments during his time at the company. While they were able to onboard some large merchants, such as Overstock, to accept BTC, it was evident that there wasn’t a sustainable business case for bitcoin payments.
Instead, Tomaino highlighted the emergence of decentralized finance (defi) and Ethereum’s smart contracts functionality as key developments in the cryptocurrency industry. These advancements led to the surge in the crypto asset class and changed the course of its future.
Coinbase Commerce, the payment infrastructure of Coinbase, recently discontinued the option of making bitcoin payments using unhosted wallets due to internal difficulties. The company’s CEO, Brian Armstrong, expressed that they are focusing on incorporating Layer 2 (L2) solutions, as they believe this is where the future of payments lies.
As the cryptocurrency industry continues to evolve, it is evident that the use cases for bitcoin and other cryptocurrencies will vary. While bitcoin’s role as a payments tool may have diminished, new opportunities and functionalities have emerged, shaping the landscape of digital finance.