Published: Thu, December 07, 2017
Research | By Raquel Erickson

Steam dumps Bitcoin on back of high transaction fees and volatility

Steam dumps Bitcoin on back of high transaction fees and volatility

As of today, Steam will no longer support Bitcoin as a payment method on our platform due to high fees and volatility in the value of Bitcoin.

The value of the cryptocurrency is only guaranteed for a certain period of time so if the transaction doesn't complete within that window of time, then the amount of Bitcoin needed to cover the transaction can change.

"Unfortunately, Valve has no control over the amount of the fee", wrote Chinn. "These fees result in unreasonably high costs for purchasing games when paying with Bitcoin", the company added. The speculative frenzy has at times created massive lag in the already inherently limited speed of transactions across the Bitcoin network and jacked up processing fees.

The value has recently become very unstable and has been known to drop in value by as much as 25% over just a few days.

If people still want to purchase games with Bitcoin, they will have to find workarounds to do so such as using legitimate Bitcoin gift card sites which allow people to buy gift cards with their Bitcoins.

But in the event of especially big price changes Steam would either refund the difference (if the price of bitcoin increased), or ask the customer to make a top up payment (if the price of bitcoin decreased).

Bitcoin has risen in value for years, but the increase in the past several months has been especially explosive. Fees have skyrocketed since the beginning of the year. With the constantly changing price of Bitcoin, the usual method of adding more funds to cover the cost of a game or getting a full refund won't work because of the high fees.

The secondary issue is transaction fees.

Steam announced back in 2016 that it had partnered with Bitcoin, and its service Bitpay, to allow gamers to purchase games on Steam using the Bitcoin currency.

Valve is not necessarily done with cryptocurrency even though it has removed Bitcoin as a payment option.

For example, transactions can often get bottlenecked, so some users have suggested expanding the network's capacity. Today, Bitcoin is surging past $12,000 per coin, so it may be a surprise for users to hear that Steam is removing support for the digital money.

The volatility has caused one company that was accepting bitcoin to drop the currency. Steam closed its announcement by saying, "We may re-evaluate whether Bitcoin makes sense for us and for the Steam community at a later date".

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