- Steam is one of the most popular gaming services in the world, with 67 million monthly active players, putting it head-to-head with Sony’s PlayStation Network.
- Steam, owned by Valve Corporation, sells PC games through an online store.
- On Wednesday, it canned its support for bitcoin payments, saying the cryptocurrency is too volatile.
- Kurtis Chinn, a Valve engineer, says this means transaction fees for customers buying games had fluctuated too quickly as bitcoin’s value did the same.
- Steam began accepting bitcoin in April 2016.
The hugely popular gaming store Steam has stopped accepting bitcoin payments for games, saying the cryptocurrency is too volatile.
In a blog post on Wednesday announcing the changes, Kurtis Chinn, an engineer, wrote, “As of today, Steam will no longer support bitcoin as a payment method on our platform due to high fees and volatility in the value of bitcoin.”
Steam, owned and operated by Valve Corporation, rivals Sony’s PlayStation Network as the world’s biggest gaming service, with 67 million monthly active players versus Sony’s 70 million.
The decision to halt bitcoin payments doesn’t seem to be related to the various controversies around bitcoin – such as whether it predominantly benefits criminals or is a massive energy drain – but because its skyrocketing value means higher transaction fees. Steam began accepting bitcoin in April 2016.
Here’s what Chinn wrote:
“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. For example, transaction fees that are charged to the customer by the bitcoin network have skyrocketed this year, topping out at close to $20 a transaction last week (compared to roughly $0.20 when we initially enabled bitcoin).”
Valve has no control over the transaction fee, he said, adding that if bitcoin suddenly plunged in value, that would create more problems.
“When checking out on Steam, a customer will transfer X amount of bitcoin for the cost of the game, plus Y amount of bitcoin to cover the transaction fee charged by the bitcoin network,” Chinn wrote. “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. The amount it can change has been increasing recently to a point where it can be significantly different.”
Bitcoin, he noted, can lose as much as 25% of its value in a matter of days.
Bitcoin has recently spiked massively in value, rising to $15,000 (£11,200) from $14,000 in 12 hours on Thursday.
“At this point, it has become untenable to support bitcoin as a payment option,” Chinn said. “We may re-evaluate whether bitcoin makes sense for us and for the Steam community at a later date.”
There’s overlap between Steam users and bitcoin enthusiasts
Bitcoin is notable for preserving the anonymity of its users, but the hundreds of comments underneath Chinn’s posts – and on Reddit – suggest there’s overlap between Steam gamers and cryptocurrency traders.
Users commenting on Chinn’s post described it as a “stupid decision” and “lame.” On the r/bitcoin subreddit, users debated whether Steam’s decision was a good outcome for bitcoin, with some arguing that the cryptocurrency needed to solve its growth issues.