Monday, 11 December, 2017

Steam no longer accepting bitcoin due to 'high fees and volatility'

Steam-Logo 610 Citing volatile value, Steam drops Bitcoin support
Theresa Hayes | 07 December, 2017, 06:17

Bitstamp, one of the most established exchanges for cryptocurrency, announced that it would trade Bitcoin Cash in November. In the morning, you might buy a standard edition video game, but by mid-afternoon, maybe you could've bought the deluxe edition for the same price.

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

"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".

The reason for this is inherent to the way the Bitcoin protocol works; the number of bitcoins is controlled by having computers generate them via so-called "mining" operations, which are essentially complicated math problems.

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).

"The amount it can change has been increasing recently to a point where it can be significantly different", the game distributor said. This problem arises when a transaction is not completed within the period of time that the amount of Bitcoin paid is commensurate to the price of a game or a service offered on Steam's Store. Making this a huge profitability issue especially when the value of Bitcoin itself drops dramatically.

"Unfortunately, Valve has no control over the amount of the fee", wrote Chinn. If the user then needs to either pay more money, or receive a refund from Steam, they are hit with another costly transaction fee from Bitcoin.

The post explained that, due to the recent increase in volatility of the value of Bitcoins over the past few months, which includes very steep fees simply for processing transactions via Bitcoin, Steam feels that the currency is no longer suitable.

Steam's decision to drop bitcoin from its payment options portends challenges to bitcoin functioning as a currency. Hard to tell at this point.

Valve began accepting Bitcoin on its Steam service in 2016 to accommodate global users that might not have access to traditional payment options. That is unlikely at this point. When a gamer requests a refund, it left a gray area as to whether they should be refunded the U.S. dollar equivalent of their transaction or if they should just have their Bitcoin returned to them.