Bitmain subsidiary BTC.com has become the latest bitcoin wallet provider to adopt the BIP70 transaction framework, enabling the company’s 1 million customers to send payments to businesses in cryptocurrency payment processor BitPay’s $1 billion merchant market.
BTC.Com Adopts BIP70 for Commercial Bitcoin Payments
Originally proposed in 2013 by early Bitcoin developers Gavin Andresen and Mike Hearn, Bitcoin Improvement Proposal 70 (BIP70) was designed to improve the customer experience for commercial transactions involving cryptocurrency.
BIP70 seeks to accomplish this by allowing customers to make payments to human-readable payment addresses(e.g. “example.com), rather than standard bitcoin addresses, which are long and easy to misread. The payment standard also includes support for transaction received messages, as well as the automatic generation of refund addresses.
At the beginning of the year, BitPay adopted BIP70 as its invoicing standard, requiring all users sending BTC and BCH payments to BitPay merchants to use BIP70-compatible wallets. The firm said recently that, following this policy change, the rate of payment errors has plummeted to just 0.27 percent of all transactions, down from nearly 10 percent in June 2017.
That, according to BTC.com VP of business operations Alejandro de la Torre, is why BTC.com decided to adopt BIP70 for its 1 million bitcoin and bitcoin cash wallets.
Speaking exclusively to CCN, he said:
“When a merchant uses BitPay, in order for their customers to pay using bitcoin or bitcoin cash, they must use a BIP 70 compatible wallet to complete the transaction. BitPay is one of the biggest providers of crypto-merchant services, and we believe in offering the best payment experience for our users that also supports onboarding merchants.”
Criticism of BIP70
BitPay says that BIP70 drastically reduced payment errors, but critics say it brings other risks.
However, many wallet services have declined to upgrade to BIP70, instead sticking with the heretofore universally-supported BIP21. Critics, including privacy-centric wallet provider Samourai Wallet, allege that BIP70 could lead to increased risk of AML/KYC surveillance, as well as more effective user blacklists. They also warn that this payment standard could render bitcoin payments vulnerable to security bugs in OpenSSL.
In a blog post published earlier this year, Samourai Wallet accused BitPay of using its market-leading position in the cryptocurrency payment processor space to “bully wallet providers into supporting their business plans or bully users into a system that degrades their privacy and the fungibility of bitcoin as a whole.”
However, BTC.com does not share those concerns. Speaking to CCN, de la Torre said, “We have taken the time to carefully evaluate all security and privacy concerns, and we are certain that our users are completely safe with the BTC.com wallet.”
Looking forward, de la Torre said that taking steps to make cryptocurrency payments more user-friendly will help them “begin to compete with credit card and mobile transactions by capitalizing on current inefficiencies in traditional payment processing services,” sowing “the seeds for cultivating deep and sustainable growth from the whole bitcoin community.”