Gaming and entertainment platform Steam on Wednesday announced it would no longer support bitcoin as a payment method, citing expense in addition to market uncertainty. According to the company, the reason for dropping Bitcoin is twofold: volatility is a concern, as are the rising cost of transactions fees on the Bitcoin network. For example, when Steam first partnered with the company, transaction fees via Bitcoin were at roughly $0.20 whereas now the transaction fee stands at nearly $20 per payment. 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. "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", the company stated. 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.
Normally when this occurs, Valve will either refund the overpaid amount or require additional funds to cover the shortfall, but in both cases the customer has to eat yet another Bitcoin transaction fee.
At the time of writing, the price of one Bitcoin was just shy of $14,000. In an effort to prevent customers from wasting money on fees and to protect itself from volatility, Valve has simply made a decision to remove Bitcoin as an option during checkout. This sudden and major change in Bitcoin's value can cause in issue for those who use it to purchase games on Steam. Others, such as McAfee Antivirus founder John McAfee, fervently believe that the price will soar to $1 million per coin by 2020. The amount it can change has been increasing recently to a point where it can be significantly different.
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. Besides, very few people user Bitcoin for everyday transactions because of the very slow processing speeds and high fees involved per transaction. Steam did not return a request for comment by deadline, and its announcement did not say how long it has been accepting bitcoin.