Nick Tomaino, former business developer and marketing lead at Coinbase from 2013 to 2016, shared insights on the stagnation of bitcoin payments despite Coinbase's initial focus on leveraging the cryptocurrency for fundraising.

Responding to criticism about the user experience of using bitcoin and the Lightning Network for small transactions, Tomaino disclosed that Coinbase had encountered this challenge during his tenure around 2014.

During that period, Coinbase managed to secure $125 million in funding rounds by highlighting bitcoin's potential for retail settlements. Tomaino noted that convincing venture capitalists (VCs) of bitcoin's utility as an asset was crucial for securing investment.

However, despite attracting some significant merchants like Overstock to accept BTC, it became evident that bitcoin payments wouldn't be the primary use case in the long term. Tomaino acknowledged that while these partnerships enhanced credibility, they didn't present a sustainable business case for bitcoin payments.

Subsequently, decentralized finance (DeFi) and Ethereum's emergence with smart contracts reshaped the crypto landscape, leading to significant growth in the asset class. Tomaino concluded by noting the pivotal role these developments played in the industry's evolution.

In February, Coinbase Commerce discontinued support for bitcoin payments using unhosted wallets due to operational challenges. CEO Brian Armstrong stated the company's focus on integrating Layer 2 (L2) solutions, as they believe this is where future payments will occur.