BitPay challenged by new payment addresses

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BitPay, a crypto payment processor, is possibly facing a challenge in terms of the way it creates payment addresses, as developers plan to remove support for its current method.

According to Cointelegraph, in a GitHub discussion about the future 0.19.0 release of the Bitcoin Core client, developers continued plans to disable BIP70 by default, and possibly remove it altogether in a later version. This was first proposed in March and work on it is ongoing.

The issue is this: “BitPay has stuck to using the payment address format defined in BIP70, whilst other wallets and payment businesses have joined the majority of Bitcoin users in preferring BIP21. Ultimately this leaves BitPay wallets with little support.”

However, BitPay continues to use the same address format, and this has led to frustration, as “those wanting to pay in Bitcoin often find their wallet does not allow payment of BitPay invoices.”

In the past, BitPay allowed the extraction of the destination Bitcoin address from its invoices for those who could not or did not wish to use BIP70, but this feature has disappeared.

BIP70 lost out to BIP21, because its security setup involved using centralized technology markets and paved the way for Anti-Money Laundering and Know Your Customer options to enter Bitcoin merchant transactions.

When discussing the possibility of freezing out BitPay, Bitcoin Core developer Luke-jr did not hold back. In March he wrote on Github, “Do any merchants require BIP70 at this point? (A particular payment processor claims it does, but AFAIK their implementation is broken and already doesn’t work with Core.).”

BitPay has been defending its decision to use BIP70 and has published a number of posts dedicated to the issue, including one in January 2018 in which it defends its decision to force users to switch wallets solely to pay its invoices.

Cointelegraph also points out that it has published reports before about BitPay facing controversy over its business practices and technical setup, with opponents frequently calling for a boycott. For example, BTCPay, a competitor for merchant transactions, “has been gaining momentum since 2018, while last week saw the announcement of a Lightning Network-based alternative from Zap wallet.”

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