Bitcoin is causing too many complications for Valve, so the company has announced that it will no longer accept the digital cryptocurrency. In a blog post, Valve explained that bitcoin transaction fees have gone up to almost $20 per transaction last week, "compared to roughly $0.20 when we initially enabled Bitcoin". 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. The company is attributing its decision to cryptocurrency's "high fees and volatility".
Valve said the recent dips and spikes in Bitcoin were signs that the "degree of volatility has become extreme".
But this only applies if you were holding BTC and wanted to see the price drive up, meaning you wouldn't use it in the real-world if the value continues skyrocketing like it has this year - going from $1000 to almost $13,000 in 12 months.
Steam's original policy was to refund the original payment method back to the buyer or request additional Bitcoin to cover the change in value. "So if the transaction doesn't complete within that window of time, then the amount of Bitcoin needed to cover the transaction can change".
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Valve announced that they would no longer allow Bitcoin to used for purchasing content on Steam.
The secondary issue is transaction fees. In addition, the volatility of Bitcoin can also adversely affect the platform's own revenue if the price of Bitcoin suddenly drops. In early September, Bitcoin was almost 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.
Cryptocurrencies have been gaining popularity as of late, with Bitcoin, Ethereum, Litecoin, Ripple and others steadily growing in value. On Jan. 1 this year, bitcoin was priced at just under $1,000.
"We may re-evaluate whether Bitcoin makes sense for us and for the Steam community at a later date", wrote Chinn. However, the Bitcoin Cash fork, which was created in August and allows for a greater volume of transactions, could give us a glimpse into whether these concerns are merited.
For example, transactions can often get bottlenecked, so some users have suggested expanding the network's capacity.