Valve is ending support for Steam purchases made with bitcoin, the company said today, citing “high fees and volatility” in the value of the cryptocurrency.
“In the past few months we’ve seen an increase in the volatility in the value of Bitcoin and a significant increase in the fees to process transactions on the Bitcoin network,” Valve said in a post on Steam. “For example, 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). 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.”
Valve said that the degree of volatility in bitcoin value “has become extreme in the last few months, losing as much as 25% in value over a period of days.” The open source cryptocurrency reached new highs this week, reaching a value of $12,000 per bitcoin today, jumping $1,000 in just 24 hours.
Valve explained why surges like that can have an impact on purchases through Steam.
“When checking out on Steam, a customer will transfer x amount of Bitcoin for the cost of the game, plus y amount of Bitcoin to cover the transaction fee charged by the Bitcoin network,” the company said. “The value of Bitcoin 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. The amount it can change has been increasing recently to a point where it can be significantly different.”
Valve said that those price discrepancies will normally result in a refund or an additional payment from the customer when more traditional, more stable currencies are involved. But in the case of bitcoin, high transaction fees can make those resolutions costly.
“At this point, it has become untenable to support Bitcoin as a payment option,” Valve said. “We may re-evaluate whether Bitcoin makes sense for us and for the Steam community at a later date.”
Valve added support for Steam purchases with bitcoin in 2016 as part of a partnership with company Bitpay.
- Bitcoin Is Soaring. Here's Why It's Not Ready for the Big Time
- Bitcoin price crosses $15K despite bubble warnings, with a total market capitalization of ~$256B (David Meyer/Fortune)
- Coinbase has launched instant cryptocurrency purchases of up to $25K from US bank accounts, dropping the typical wait period of 3-5 days (Fitz Tepper/TechCrunch)
- Average Bitcoin transaction uses 215 KWh of energy, enough to run an average US house for nearly a week; there are currently 300K Bitcoin transactions per day (Christopher Malmo/Motherboard)
- Coinbase CEO says exchange services may be “degraded or unavailable” during high volume or volatile trading sessions, after recent downtime incidents (Frank Chaparro/Business Insider)
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