Bitcoin continues to soar in price, but one company isn’t impressed with its recent success. Valve announced today that its Steam service won’t support Bitcoin as a method of payment due the high fees and unpredictable changes in the currency’s value.
Valve said the recent dips and spikes in Bitcoin were signs that the “degree of volatility has become extreme.” Earlier today, the cryptocurrency hit the $12,500 mark, which is 25% higher than in November. However, it wasn’t always the best of times for Bitcoin owners. In early September, Bitcoin was nearly worth $5,000 per unit, but the closing of BTC China (due to new rules from government regulators) saw a significant dip in the currency’s value. This sudden and major change in Bitcoin’s value can cause in issue for those who use it to purchase games on Steam.
“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,” Valve said. “The amount it can change has been increasing recently to a point where it can be significantly different.”
Another issue with Bitcoin are the transaction fees. Valve wrote that payments rose to as high as $20 per transaction in the last week. For comparison, the fee during Bitcoin’s early days was only $0.20. With the constantly changing price of Bitcoin, the usual method of adding more funds to cover the cost of a game or getting a full refund won’t work because of the high fees. At the current $20 mark Valve said that “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 change while the Bitcoin network processes the additional transfer).”
Valve might be backing out of Bitcoin support for now, but it said that it might revisit the issue and its impact on the company and the community in the future. In the meantime, it’s still working with customers who were affected by the recent rise in Bitcoin value whether it’s with existing payments or transaction fees.
Bitcoin’s recent rise in value has made some of its investors rich, most notably the Winklevoss twins who bought $11 million of the cryptocurrency when each coin was valued at $120. Some people believe that it’s all a bubble and that the prices will crash back down when it eventually bursts. Others, such as McAfee Antivirus founder John McAfee, fervently believe that the price will soar to $1 million per coin by 2020. In either case, it’s clear that Bitcoin isn’t going away anytime soon, but Valve’s lack of support for it might have an impact on its value.