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.
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Good decision by STEAM.Reply
In Addition :Reply
This is one good example of disadvantage of using crypto currency when u buy a product or services that needs a refund due to different reasons or needs a huge change amount where a real monetary (option or means) is not available (online transactions).
I agree with STEAM's decision.
I agree. Good choice steam. Garbage pyramid scheme "currency".Reply
When did steam ever even accept bitcoin?Reply
I missed that entirely. Or is this just a click-bait article?
Good, first miners ruined gamers market for PC parts and now they want to use gaming platform.Reply
Bitcoin and other cryptocurrencies should go down the gutter drain.
I see no reason why Steam shouldn't be able to accept any other currency that is more stable and has a less expensive exchange fee.Reply
How do you mean?20455647 said:This is one good example of disadvantage of using crypto currency when u buy a product or services that needs a refund ... where a real monetary (option or means) is not available (online transactions).
The Steam prices were not set in BTC but in EUR (here in Europe). If the price is €30 you could pay the equivalent in BTC at the time of purchase, and then get the equivalent of €30 back in case of a refund. If the exchange rate changed in the mean time you'd just get a different amount of BTC back compared to what you paid, just as if you use any other currency.
The only difference is that the BTC is very unstable and the exchange fees are way too high for small transactions.
The article mentions people getting rich; only if they cashed in their BTCs for normal money, otherwise it's still digital vapourware that can vanish overnight. But then, normal money can do that too I guess, just ask the Cypriots. :\Reply
This simple announcement can drop the value 50%.Reply
I'm honestly surprised any retailer takes BitCoin atm. As the article mentions, it is still way too volatile with values swaying quite a bit from day to day.Reply
The other thing is without any true backing, BitCoin could all of a sudden one day drop by a extremely large amount (90%+); something stocks do not do anymore since after the Stock Market Crash there is government protection preventing a stock from falling too far in one day. BitCoin isn't considered money, but an asset. Valve would lose tons of money if something like that happened and right now it is too much of a risk for them.
For those who don't think a drop like this is possible, if one or 2 of the major holders of BitCoins decides to suddenly sell off all his coins one day (for massive profit), the value of the coin will plummet.
20457952 said:... something stocks do not do anymore since after the Stock Market Crash there is government protection preventing a stock from falling too far in one day. ...
Wow, talk about over-confidence in the state. :D Here we are with state debts in the tens of trillions and people think the state can prevent a market crash because Reasons. :D:D
Of course there'll be another crash some day, and artificial measures can't stop them, infact they just make it worse by preventing natural corrections (when markets are allowed to reopen, the values just drop even more), and indeed numerous corrections that should have happened ages go get kicked down the road via ever more borrowing. "Too big to fail" is probably the most stupid invention of politicians in the last 20 years.
Bitcoin is volatile because it has no real connection to actual wealth creation, and no proper infrastructure to help keep it stable. It's a massive gamble based on perceived value, in which there will be winners and losers. The winners will be delighted, the losers will moan and throw a hissy fit, but it was their own choice to take the risk. Bitcoin is as potentially ephemeral as a chunk of astatine.