Bitcoin has seen a meteoric rise in value over the past few years. While this is good news in general for any who bought in to the cryptocurrency early, at least one company has decided it won’t be accepting bitcoin any longer: Steam.
Valve initially began accepting bitcoin payments a little over a year and a half ago. In that time, however, the value of bitcoin has changed dramatically, and Valve no longer wants to trade in such a “volatile” currency.
“In the past few months we’ve seen an increase in the volatility in the nature of Bitcoin and a significant increase in the fees to process transactions on the Bitcoin network,” Valve explained in a post on the Steam Blog. “For example, transaction fees that are charged to the customer by the Bitcoin network have skyrocketed this year, topping out a close to $20 a transaction last week (compared to roughly $0.20 when we initially enabled Bitcoin).”
In other words, the cost to Valve to process bitcoin transactions has jumped up by two orders of magnitude, making it a much more expensive currency to support. On top of that, the ever-changing value of the currency makes it difficult for customers to accurately pay the correct amount for games.
“Historically, the value of Bitcoin has been volatile, but the degree of volatility has become extreme in the last few months, losing as much as 25% in value over a period of days,” Valve explained. “This creates a problem for customers trying to purchase games with Bitcoin. 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 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.”
Attempting to sort out these differences in pricing requires more bitcoin transfers, and therefore more bitcoin network transaction fees. Even this can create a secondary loop, where a customer attempts to pay the fee, the prices change, and the fee is not paid in full, making the customers have to pay again and rack up another transaction fee. It’s a situation that is, as Valve puts it, “untenable.”
All hope is not lost for fans of cryptocurrency, though. Valve has said that it may reevaluate bitcoin transactions in the future, depending on “what makes sense for us and for the Steam community.” In the meantime, Valve will continue to sort out any pending issues with bitcoin payments before halting use of the currency—at least, for now.
Source: Steam Blog