Last year, Valve made the rather progressive business decision to support bitcoin, as part of a partnership with company Bitpay. That's right, you could buy video games on Steam with bitcoin. At least, until now.
Valve said that it is ending support for Steam purchases made with bitcoin, citing “high fees and volatility” in the value of the cryptocurrency. “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,” Valve said in a post on Steam.
“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.”
Valve said that the degree of volatility in bitcoin value “has become extreme in the last few months, losing as much as 25% in value over a period of days.” New highs were reached over the previous week, reaching a value of $12,000 per coin today which translates to a $1,000 leap in just 24 hours. Valve explained why surges like that can have an impact on purchases through Steam:
“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.”
Such price discrepancies would normally be refunded or require an additional payment from the customer when using traditional / stable currencies. But high transaction fees associated with bitcoin can make those resolutions pricey.
“At this point, it has become untenable to support Bitcoin as a payment option,” Valve said. “We may re-evaluate whether Bitcoin makes sense for us and for the Steam community at a later date.”