Steam is one of the best portals for PC gamers to purchase titles digitally. With Valve adding Bitcoin as a payment method, the company has decided to finally revoke the payment method. However, we remain hopeful that they will once again pick up Bitcoin or perhaps a different alt coin, Veridium or Etherium, in the near future. Today, the folks over at Valve gave their words about why they are revoking the digital currency as a payment method on Steam.
The company clarified its stance on the revoke by elaborating how the currency has served them. They claim that due to the volatility in the value of Bitcoin and the high fee they’re deciding to revoke the booming currency. Steam had quite a lot to elaborate on topic. Here is what they said in their blog post.
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, they said. They further elaborated, 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.
They further added on how unstable the digital currency actually is. They said:
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. 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.
The normal resolution for this is to either refund the original payment to the user, or ask the user to transfer additional funds to cover the remaining balance. In both these cases, the user is hit with the Bitcoin network transaction fee again. This year, we’ve seen increasing number of customers get into this state. With the transaction fee being so high right now, it is not feasible to refund or ask the customer to transfer the missing balance (which itself runs the risk of underpayment again, depending on how much the value of Bitcoin changes while the Bitcoin network processes the additional transfer).
Steam definitely has some genuine concerns of the currency. However, looking at what scale the company operates at, if the value of Bitcoin falls, the loss would be immense for Valve. However, this may not be the end for the currency at Steam though. The blog post also mentioned that Steam may reconsider Bitcoin in the future.