Steam ends support for Bitcoin due to high fees, volatility

Steam ends support for Bitcoin due to high fees, volatility

Bitcoin is causing too many complications for Valve, so the company has announced that it will no longer accept the digital cryptocurrency.

This news comes on the heels of the 1.0 release of the Lightning Network Specification, a technology that could potentially solve any issues Valve's game distribution platform might have with BTC.

As per the announcement, the reasoning behind this decision is two-fold: rising transaction fees and bitcoin value volatility. In a blog post, Valve explained that bitcoin transaction fees have gone up to almost $20 per transaction last week, "compared to roughly $0.20 when we initially enabled Bitcoin".

"Unfortunately, Valve has no control over the amount of the fee", wrote Chinn.

The company detailed the decision on Steam's official blog, explaining that recent fluctuations in the value of Bitcoin have made using it on Steam unreasonably hard and costly for consumers. But high fees and the roller coaster market value have convinced Valve to give it up as a viable alternative to traditional payment methods.

According to steam, the volatility of Bitcoin has been "extreme" in the last few month. 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. This in turn runs the risk of under/overpayment again should the value of Bitcoin change and can result in yet another transaction needing to be performed. Fees have skyrocketed since the beginning of the year. In 2016, Valve chose to partner with Bitpay which allowed users to store Bitcoins in their steam wallets for game purchases. When a gamer requests a refund, it left a gray area as to whether they should be refunded the United States dollar equivalent of their transaction or if they should just have their Bitcoin returned to them. After crossing the $11,000 mark for the first time a week ago, the currency lost 20 percent of its value in one day.

There's no good customer service response to this problem, Valve added, because if there's an imbalance in payments the same problem can repeat itself, and users can be hit with additional transaction fees. For these reasons and the overall volatility of the currency, it's "untenable" to support Bitcoin at the moment, the blog said. In both cases the once-negligible transaction fees would be at the customers' expense. For Bitcoin, however, the cryptocurrency market takes a fee when a Bitcoin owner initiates a transaction.

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