At a time when the whole world is going crazy over bitcoin, Steam has decided to pull the plug on bitcoin transactions because of network congestion, price volatility and exorbitant fees.
In an announcement today, Steam pointed out the price volatility of bitcoin over the last few months as well as the transaction fees that users have to pay when they transact on Steam using bitcoin. The online gaming platform said that transaction fees have increased by manifolds over the last few months and this has made life for its customers as well as the company a lot harder.
“…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)”, Steam said in its blog post.
Because Valve has no control over the transaction fees, there are cases when the trasaction fees are sometimes higher than the value of the purchase and this makes the transaction unreasonably costly.
Couple the transaction fees issue with that of price volatility, things go much worse. Steam points out that the value of Bitcoin is only guaranteed for a certain period of time for a particular transaction and 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.
The normal resolution for this is to either refund the original payment to the user, or ask the user to transfer additional funds to cover the remaining balance. In both these cases, the user is hit with the Bitcoin network transaction fee again. This year, we’ve seen increasing number of customers get into this state. With the transaction fee being so high right now, it is not feasible to refund or ask the customer to transfer the missing balance (which itself runs the risk of underpayment again, depending on how much the value of Bitcoin changes while the Bitcoin network processes the additional transfer).
Steam says they may re-evaluate their bitcoin stance in future.