Bitcoin’s ‘high fees and volatility’ to blame for Steam ditching cryptocurrency
Gaming marketplace Steam has announced that it would stop accepting bitcoin for payments due to the cryptocurrency’s “high fees and volatility in the value”.
The PC-centric platform, which is owned by the developer Valve, made the announcement on Wednesday (6 December), the same day that the value of bitcoin spiked at an all-time high of more than £11,000.
“It has become untenable to support bitcoin as a payment option,” the Steam statement read.
“We may re-evaluate whether bitcoin makes sense for us and for the Steam community at a later date.”
Bitcoin, like rivals Litecoin and Ethereum, is a form of currency produced and used over the internet.
It is built upon a decentralised ledger technology more widely known as the blockchain and – for better or worse – does not rely on traditional banks to operate.
As the Steam team noted, its value spikes and dips daily. The firm also complained that transaction fees associated with bitcoin had “skyrocketed” in 2017.
Some financial experts believe that the continued rise in value of a single coin is evidence that the digital money is a bubble and one that is set to burst imminently, costing investors heavily.
In a blog post, Steam said: “Transaction fees that are charged to the customer by the bitcoin network have skyrocketed this year, topping out at close to $20 a transaction last week (compared to roughly $0.20 when we initially enabled bitcoin).”
Steam launched bitcoin payments in April 2016.
The post added: “Unfortunately, Valve has no control over the amount of the fee. These fees result in unreasonably high costs for purchasing games when paying with bitcoin. The high transaction fees cause even greater problems when the value of bitcoin itself drops dramatically.”
Steam said a high degree of uncertainty in value had previously led to some customers needing refunds as prices change on a whim – leaving inconsistencies in what products are worth.
It noted that value is only guaranteed for a short time. “If the transaction doesn’t complete within that window of time, then the amount needed to cover the transaction can change,” it said.
“The amount it can change has been increasing recently to a point where it can be significantly different. The normal resolution for this is to either refund the original payment to the user, or ask the user to transfer additional funds to cover the remaining balance.
“In both these cases, the user is hit with the bitcoin network transaction fee again.”
At time of writing, the value of bitcoin is £11,150 ($14,570) per coin. Steam boasts more than 100 million players and hosts games for PC, Mac and Linux.