Fees, market uncertainty make bitcoin "untenable" for gaming platform Steam

Pablo Tucker
December 7, 2017

Valve's Steam, the digital distribution platform which enjoys near-monopolistic control of the entire PC gaming industry, has stopped accepting bitcoins as a form of payment due to the currency's volatility and increasingly unacceptable processing fees.

The online game distributor stated concerns about the volatile nature of Bitcoin's value as well as the increase in fees it requires to process transactions made with the cryptocurrency. Regarding the fees, Valve pointed out that the transaction fee charged to the customer using Bitcoin rose from 20 cents when Valve started accepting it to nearly $20 today. Those fees then have to be shouldered by gamers making purchases on Steam, and the total cost to consumers could be even higher if the value of bitcoin dips in the meantime. Not only that, but there was an increase in the fees to process transactions on the Bitcoin network.

Steam's usual procedure accounted for volatility by guaranteeing the value of bitcoin for 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. The amount it can change has been increasing recently to a point where it can be significantly different. Fees have skyrocketed since the beginning of the year. Newer cryptocurrencies such as Bitcoin Cash, Ethereum and Litecoin all offer much lower transaction fees and faster confirmation times than Bitcoin. This year, we've seen increasing number of customers get into this state.

When Valve started to accept Bitcoin as a payment method last April, the value of the cryptocurrency was at $450, as pointed out by Ars Technica.

That doesn't mean it's going away forever, but right now it simply isn't viable to continue to support a currency that's too unpredictable for both the vendor and customers.

The company said that it may revisit its decision in future, but at the present time it is "untenable" to support it as a payment option.

While it is pulling the plug on accepting the cryptocurrency for now, Valve isn't ruling it out completely, with it concluding the blog post saying that it may "re-evaluate whether Bitcoin makes sense for us and for the Steam community at a later date".

At present, however, Steam is focusing on working with customers to resolve any pending issues related to underpayments or transaction fees.

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