Citing price volatility and transaction fees, Steam, the popular online gaming platform, is out of the bitcoin business effective 6 December. The world’s most popular cryptographic currency is ripping all economic textbooks apart, reaching price highs unimaginable just weeks, if not hours, ago. That, and a congested mempool with transacting costs to compound, means a significant source for bitcoiners’ amusement is now a thing of the past.
Steam Is No Longer Supporting Bitcoin
A division of Valve Corporation, a Pacific Northwest US video game developer, the company has been around for more than a decade. It ranks routinely on Alexa in the top 200 sites in the world. It is the largest gaming retailer of its kind in the US and Europe.
“These fees result in unreasonably high costs for purchasing games when paying with Bitcoin. The high transaction fees cause even greater problems when the value of Bitcoin itself drops dramatically,” the post complained.
Steam began accepting bitcoin back in Spring of 2016 in conjunction with Bitpay.
25% Loss of Value is an Untenable Situation
“Historically,” the explanatory post continues, “the value of Bitcoin has been volatile, but the degree of volatility has become extreme in the last few months, losing as much as 25% in value over a period of days.”
Indeed, price spiking can complicate matters. If transactions are not confirmed within certain windows of time, very often it can be the case the initial amount doesn’t cover. That, and then there is the process of notifying the customer, resettling accounts, and added transaction fees. It’s a cycle bound to frustrate customers and to bog down merchants, an awful combination for commerce.
“This year, we’ve seen increasing number of customers get into this state,” the company noted. “At this point, it has become untenable to support Bitcoin as a payment option. We may re-evaluate whether Bitcoin makes sense for us and for the Steam community at a later date.”
Though a setback for bitcoiners who game, it is a feather in the cap of those who continually point to bitcoin’s increasing frictions and evidence that bitcoin might be coming “too valuable” to use.
Legacy payment systems from the traditional banking industry will undoubtedly point to Steam as a prime example of why their services last. And, at the very least, competitors can be sure to swipe a number of customers away by accepting bitcoin.
What do you think of Steam’s decision? Are high fees and volatility reason enough to bow out of bitcoin?