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 cryptocurrency's surge seems to have made it too volatile and expensive for the platform to continue to accept it, as Valve announced on Wednesday it will no longer accept bitcoin payments.
The value of bitcoin has seen a tremendous rise recently, with it even going past $12,000 today. "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)".
Valve's shirking of bitcoin is another development in a broader debate about the usefulness of the cryptocurrency. "These fees result in unreasonably high costs for purchasing games when paying with Bitcoin", the company added.
The posted therefore concluded that "At this point, it has become untenable to support Bitcoin as a payment option" but left open the option of revisiting the cryptocurrency in future. "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)", Valve wrote.
The problem stems from the fact that Bitcoin's value is guaranteed only for a short time when making purchases with the cryptocurrency. But transactions can often take longer than the Bitcoin Network guarantees the value of the currency. If any transaction didn't complete within that window of time, it was subject to a potential price change, which can significantly alter the cost.
Steam's original policy was to refund the original payment method back to the buyer or request additional Bitcoin to cover the change in value. "This year, we've seen increasing number [s] of customers get into this state", the post states.
Valve's decision comes as crypto-cash mining market NiceHash reported a "security breach" had meant hackers had accessed its Bitcoin wallet, which had contained about $60m in bitcoins.
"We may re-evaluate whether bitcoin makes sense for us and for the Steam community at a later date", the post explained.