Steam has announced that it will no longer be accepting Bitcoin as ways of payment for games and other products on its platform. The reason for the change of heart on the cryptocurrency is the volatility and transaction fees the payment method has associated with it.
For example, the transaction fees when Steam first started accepting Bitcoin was $0.20 and that has risen to $20 per transaction now.
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).
With regards to the volatility of the value of Bitcoin, Valve explained that the time it takes for the funds to process through the Bitcoin network means that by the time Steam gets the funds, the value of the payment could have increased or decreased.
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. 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.
When the value fluctuates in the time it takes for a Bitcoin purchase to process, Valve is left with one of two potential options neither of which benefit the customer.
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.
As to whether it is the end of Steam accepting Bitcoin, they explain that they may re-evaluate whether it makes business sense to accept the payment method again at a later date.