Published: Thu, December 07, 2017
Sci-tech | By Carrie Guzman

Citing volatile value, Steam drops Bitcoin support

Citing volatile value, Steam drops Bitcoin support

Valve has stopped accepting Bitcoin for Steam purchases, the game developer said Wednesday, citing the cryptocurrency's high fees and volatility as the impetus behind the move.

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. Valve has no way to control these fees, which can raise the costs of games to unreasonably high amounts that have to be shouldered by customers. Now, just over a year later, Valve has seen transaction fees as high as $20.

The reason for this is inherent to the way the Bitcoin protocol works; the number of bitcoins is controlled by having computers generate them via so-called "mining" operations, which are essentially complicated math problems.

Even if the value of bitcoin were to go up while the user completes the transaction, and Steam has to refund the difference to the user, the transaction fee must be paid by the user again for the refund. "The high transaction fees cause even greater problems when the value of Bitcoin itself drops dramatically". After giving customers a payment time window of several hours for their transaction to confirm on the Bitcoin blockchain, the value of the coin could have already significantly changed. Fees have skyrocketed since the beginning of the year.

Under the European Union-wide plan, online platforms where Bitcoin is traded will be required to carry out due diligence on customers and report suspicious transactions, with the move created to end the anonymity of the cryptocurrency. In 2016, Valve chose to partner with Bitpay which allowed users to store Bitcoins in their steam wallets for game purchases.

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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.

As a result, Valve said support for Bitcoin has become "untenable", but it said it might reevaluate the cryptocurrency's fit into its business at a later date.

For example, transactions can often get bottlenecked, so some users have suggested expanding the network's capacity.

Valve "may" re-evaluate this decision further on down the road, but for now, they will resolve any pending transactions that this announcement has affected, as well as anyone who has been impacted by existing underpayments or transaction fees.

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