Steam gaming and video platform to stop accepting Bitcoin
In a blog post, the digital media distribution platform has announced that it will no longer be accepting payments in Bitcoin due to its unpredictability and rising transaction fees.
Steam, which is owned by Valve Corporation, offers users games and video and occupies 75 per cent of the market for digital distribution of computer games.
It began accepting payments for games and other media in Bitcoin in April 2016, making it one of the first major retailers to accept cryptocurrency payments. Bitcoin, the world’s largest cryptocurrency, has enjoyed impressive growth, having increased 1,350 per cent so far in 2017, although its rise has been interrupted with several rapid falls in value.
One Bitcoin is now worth more than $15,000 (£12,400). Whether the Bitcoin bubble is due to burst in the near future is a much-discussed subject of debate among commentators.
Since Steam began accepting Bitcoin payments, the transaction fees have grown from approximately 20 cents (15p) to $2 (£1.50). This is due to the expansion of Bitcoin leading to increased fees being charged for Bitcoin mining: the dedication of enormous amounts of computational power to solve complex mathematical problems to process Bitcoin transactions in exchange for financial rewards. This has also caused a lag in the time taken to complete transactions.
When a customer pays for a product on Steam with Bitcoin, they transfer a certain amount of Bitcoin to cover the cost of the game and the transaction fee. With the value of Bitcoin fluctuating and lagging transaction times, this means that the cost of a transaction could change in the time taken to complete the transaction.
“Steam will no longer support Bitcoin as a payment method on our platform due to high fees and volatility in the value of Bitcoin,” a blog post said.
“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.”
According to Steam, in these cases, the customer is either refunded a certain amount, or required to pay extra to cover the increase in transaction fee; in either case, they must pay the Bitcoin network transaction fee again.
“At this point, it has become untenable to support Bitcoin as a payment option,” Steam wrote.
According to Steam, it will reconsider whether Bitcoin could begin to be accepted as a payment option in the future. Given that several countries, including China, South Korea and Russia, have already begun tightly regulating cryptocurrencies and the White House is also considering regulation, Steam may be unlikely to choose to readopt Bitcoin.