Thursday, December 7th 2017

Steam Removes Bitcoin Support as Payment Option

In a blog post over at the Steam community pages, the outfit has announced that it would no longer be accepting Bitcoin as a viable payment option for purchases in the Steam store. In the blog, Steam points towards Bitcoin's high volatility as one of the reasons (the cryptocurrency very frequently sees swings in the order of hundreds of dollars in mere minutes, which makes it more difficult to properly equate Bitcoin's and the purchase's value. Additionally, Steam cites increasingly high transaction fees that sometimes can reach as much as $20, a well-known problem in the cryptocurrency's blockchain that has resisted numerous attempts at being fixed, thus generating multiple forks.

"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," the Steam team writes. Users that have been hit with requests for refunds or extra payment depending on the cryptocurrency's fluctuations can rest easy that Steam is aware of the issues and delays, and said that they "(...) will continue working to resolve any pending issues for customers who are impacted by existing underpayments or transaction fees." This event can be read in two ways: that it's a blow for Bitcoin's positioning as virtual gold, as this might start a snowball effect on other companies that accept Bitcoin as a means of payment, thus diluting the usability of the cryptocurrency and potentially affecting its value; or as a vindication for the defenders of Bitcoin as only a high-value, high-stakes cryptocurrency, leaving smaller payments to other more nimble, purpose-designed cryptocoins.

Source: Steam Community Blog
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30 Comments on Steam Removes Bitcoin Support as Payment Option

#1
R-T-B
They highlight my main complaint with bitcoin as their primary reason: Transaction fees have become unbearably high. At this point you must pay around $20 bucks just to send a transaction.

What was that about defeating swipe fees? Oh yeah, I can't hear you over my transaction fees... :laugh:

It just goes to show Bitcoin really is a dying beast, regardless of value. Some other coin will one day overtake it.

I'm watching Litecoin. More transaction volume, less fees, more usability.
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#2
Ubersonic
Interesting, the fact their reasoning is basically nonsense (volatility means nothing to them as they use a third party payment company that just gives them $) makes me wonder what they're really up to.

R-T-B said:
They highlight my main complaint with bitcoin as their primary reason: Transaction fees have become unbearably high.
Transaction fees aren't technically high, I sent $2000 for 50c last week. The issue is that people can overpay their fees in order to increase their prioritisation so it's become a kind of bidding war for instant transactions.

R-T-B said:
I'm watching Litecoin. More transaction volume, less fees, more usability.
LTC is pretty much a dead coin, it's had it's day, but hypothetically if it ever became as popular then it would have the same issue with high fees for speed.
Posted on Reply
#3
evernessince
Ubersonic said:
Interesting, the fact their reasoning is basically nonsense (volatility means nothing to them as they use a third party payment company that just gives them $) makes me wonder what they're really up to.
If you had actually read the whole blog post, you would have realized the reason Valve is no longer using bitcoin is because the cost to process bitcoin transactions is skyrocketing. You gotta love random people on the internet speculating non-sense when the answer is right in front of them.

Ubersonic said:
Transaction fees aren't technically high, I sent $2000 for 50c last week. The issue is that people can overpay their fees in order to increase their prioritisation so it's become a kind of bidding war for instant transactions.


LTC is pretty much a dead coin, it's had it's day, but hypothetically if it ever became as popular then it would have the same issue with high fees for speed.
lol, yeah because people don't want instant transactions on the internet /facepalm. You can argue that transactions fees aren't high but the fact is what actually is being payed, the "effective transaction fee" is high and that's what really matters.
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#4
Ubersonic
evernessince said:
If you had actually read the whole blog post, you would have realized the reason Valve is no longer using bitcoin is because the cost to process bitcoin transactions is skyrocketing.
I did and I pointed out it's nonsense. Firstly they don't have to pay it the customer does so it makes no difference to them whatsoever, and secondly like I explained BTC doesn't have super high fees it actually has very low fees it's just you can pay extra to prioritise your transaction which means people who want it done right this second are fighting for it.

That's why any service that lets you pay with BTC usually gives you up to an hour to make the transaction, because most people aren't going to add a nonsense fee just to get instant clearance.
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#5
R-T-B
Ubersonic said:
LTC is pretty much a dead coin, it's had it's day, but hypothetically if it ever became as popular then it would have the same issue with high fees for speed.
Dead? It's trading at $100.00, pretty much its all time high.

It also has quadrouple the transactonal capacity of bitcoin, so the same issues would take much longer to manifest.

Also, if you want your transaction paid say within 24 frickin hours (absolutely neccesary with bitcoins volatility), those high fees are still a must and thus a very bad point in bitcoins formula.
Posted on Reply
#6
ShurikN
I didn't even know there was a bitcoin payment option... :twitch:
Posted on Reply
#7
R-T-B
ShurikN said:
I didn't even know there was a bitcoin payment option... :twitch:
It was offered as a checkout method every time you checked out...
Posted on Reply
#8
xorbe
Ubersonic said:
Transaction fees aren't technically high [...] The issue is that people can overpay their fees in order to increase their prioritisation so it's become a kind of bidding war for instant transactions.
It makes no sense to me to design a monetary system in such a way. Btw, who collects the fee?
Posted on Reply
#10
notb
Ubersonic said:
Transaction fees aren't technically high, I sent $2000 for 50c last week.
I don't remember the last time I paid for a money transfer from a bank account. Most likely in 20th century.
But it's not just the fee you pay. It's the general cost of that transfer, i.e. what Steam has to pay.

When you use a credit card in a store, you don't pay anything for it. But the shop does (around 2% in US, 0.2% in EU) and they've included it in prices of their products. That means people that pay with cash are (on average) also paying for card transactions of other clients.
This becomes an issue in online game stores because accepting BTC raises your price and you're selling the exact same product other store does. So you're loosing a portion of the market.
The issue is that people can overpay their fees in order to increase their prioritisation so it's become a kind of bidding war for instant transactions.
Which makes it even worse.
Posted on Reply
#11
R-T-B
xorbe said:
It makes no sense to me to design a monetary system in such a way. Btw, who collects the fee?
The miners.

notb said:
I don't remember the last time I paid for a money transfer from a bank account. Most likely in 20th century.
In America, wire transfers aren't free and generally cost upwards of $15.00.

notb said:

But it's not just the fee you pay. It's the general cost of that transfer, i.e. what Steam has to pay.
That's not how bitpay (their payment processor) works.
Posted on Reply
#12
notb
R-T-B said:

In America, wire transfers aren't free and generally cost upwards of $15.00.
True. Banks in US are very expensive in general. And slow.
But it's not a common problem in the rest of the world and bitcoin needs more than 320 mln of Americans to get traction.

Banks in EU are very cheap (you might even find a "free" one).
And the interbank transfers are fast and rather safe.
And there are many online payments systems that are so easy to use and fast that they make bitcoin look silly.

So from a very traditional (still cash-loving) American point of view BTC might look futuristic and fantastic. From European point of view it's a bit... meh.
Posted on Reply
#13
R-T-B
notb said:
True. Banks in US are very expensive in general. And slow.
But it's not a common problem in the rest of the world and bitcoin needs more than 320 mln of Americans to get traction.
It's more than just America. Most of the 3rd world is that way. I think you'll find europe is the bubble minority rather than vice versa.
And there are many online payments systems that are so easy to use and fast that they make bitcoin look silly.
Bitcoin doesn't need help to look silly at this point, frankly.
Posted on Reply
#14
lexluthermiester
ShurikN said:
I didn't even know there was a bitcoin payment option... :twitch:
Right? Why was that ever the thing? There is a reason why currencies are regulated, it generally keeps them more stable. Cryptocoin is not regulated and is therefore about as stable as humpty-dumpty.
R-T-B said:
Bitcoin doesn't need help to look silly at this point, frankly.
Agreed, but it is a cash cow right now.
Posted on Reply
#15
riffraffy
No thanks I'll stick to plastic for now , Besides a coin slot on my case would mess with the aesthetics.
Posted on Reply
#16
trparky
lexluthermiester said:
Agreed, but it is a cash cow right now.
And like all cash cows, eventually people milk it until it's dead.
Posted on Reply
#17
TheGuruStud
trparky said:
And like all cash cows, eventually people milk it until it's dead.
Federal Reserve Bank?
Posted on Reply
#18
eidairaman1
The Exiled Airman
Hmm i wonder if coin mining could be crashing going bust?
Posted on Reply
#19
lexluthermiester
eidairaman1 said:
Hmm i wonder if coin mining could be crashing going bust?
The bubble is certainly going to pop. The question is, how bad will it crash and will it recover?
Posted on Reply
#20
Melvis
Well done steam, its about damn time!
Posted on Reply
#21
notb
lexluthermiester said:
The bubble is certainly going to pop. The question is, how bad will it crash and will it recover?
Pop it will and recover it will. Obvious that is. The force among miners strong is...

But honestly, this is a self sustain bubble by now, i.e. the value is not directly connected to how you can use cryptos today. It's more about how we expect to use them tomorrow. So in a way: people are accumulating BTC for the future. Hence, it doesn't really matter if you can't pay with BTC on Steam. There's still someone willing to buy them from you.
The only way to fix this is by state regulation, which should have become a standard in 2018. Sadly, it seems that this won't happen for the next few years...

(*) At this point BTC value is so erratic, it's very difficult to analyze the impact of external events.
Posted on Reply
#22
R0H1T
R-T-B said:
It's more than just America. Most of the 3rd world is that way. I think you'll find europe is the bubble minority rather than vice versa.



Bitcoin doesn't need help to look silly at this point, frankly.
That's not totally accurate, over here we have RTGS, NEFT & IMPS for (bank) wire transfers. The last one is instantaneous & the fees are fairly reasonable, for all of them. Then there's mobile wallets, digital transfers basically via SMS, app or in case of India ~ UPI as well. All are instant transfers, though the transfer limits are fairly low as compared to dedicated interbank transfers. So I might not know much about the US system but you're wrong in saying that wire (or money) transfers in other parts of the world is lagging behind the US, in fact US is being left behind even by sub Saharan African nations, slowly but surely.
Posted on Reply
#23
notb
R0H1T said:
That's not totally accurate, over here we have RTGS, NEFT & IMPS for (bank) wire transfers. The last one is instantaneous & the fees are fairly reasonable, for all of them. Then there's mobile wallets, digital transfers basically via SMS, app or in case of India ~ UPI as well. All are instant transfers, though the transfer limits are fairly low as compared to dedicated interbank transfers. So I might not know much about the US system but you're wrong in saying that wire (or money) transfers in other parts of the world is lagging behind the US, in fact US is being left behind even by sub Saharan African nations, slowly but surely.
The money/development argument is not as obvious as one would expect - especially if we assume that making cashless operations faster is the first step to a cashless economy. Going cashless is the CHEAP option. Cash is very expensive.
So while we mostly hear about rich countries considering removing cash (e.g. Finland is almost there), it's the poorer ones that should really care.
From what I've heard, India already has a plan for going cashless. And it's not that surprising considering how much cash you have to make for such a huge country.

It's the Americans. They are very traditional. They love cash. And American financial institutions don't force cashless operations, because... well... because cash raises their margins. :-)
And it's not just cash. Americans also love cards with magnetic stripes. I've seen results of some large pool (AFAIR done by a major bank) and they've clearly stated that Americans love the swiping and the hand-written signature. So when chip+PIN cards gained popularity few years ago, there was a flood of articles on what they are and how to use them. For me, having used such card for a decade, this was bizarre.
When you think about it: technologies that attract a lot of attention in US (like PayPal, Samsung/Apple pay, now cryptocurrencies) have little to no importance in other parts of the world.
Posted on Reply
#24
R-T-B
R0H1T said:
That's not totally accurate, over here we have RTGS, NEFT & IMPS for (bank) wire transfers. The last one is instantaneous & the fees are fairly reasonable, for all of them. Then there's mobile wallets, digital transfers basically via SMS, app or in case of India ~ UPI as well. All are instant transfers, though the transfer limits are fairly low as compared to dedicated interbank transfers. So I might not know much about the US system but you're wrong in saying that wire (or money) transfers in other parts of the world is lagging behind the US, in fact US is being left behind even by sub Saharan African nations, slowly but surely.
Thanks, that was more an assumption than a fact on my part admittedly. I guess we americans are just really really behind the times in this regard.
Posted on Reply
#25
Ubersonic
R-T-B said:
Dead? It's trading at $100.00, pretty much its all time high.
Nah it was worth around 0.038 back in 2013, it's now worth 0.0086, it's fallen to less than a quarter of its all time high. The mistake you're making is looking at the USD value instead of the BTC value, the USD value is a lot higher now simply because the USD value of BTC is and like most altcoins that's how LTC derives its value in USD.

It's sort of similar to when the news says "The pound is down against the dollar but up against the euro", what they actually mean without the positive spin is that the pound and the euro have both fallen but the euro has fallen more. Basically if the USD value of bitcoin is going up then the USD value of altcoins rises too, sometimes (and quite often) even if their value is falling at the same time like is the case with LTC. Even though it's lost 3/4 of it's value since 2013 it looks at first glance like it's shot up, when in reality anyone who's been holding all this time has actually lost a lot of money.

A really simple way to look at it is, if you had 1 BTC in 2013 and did nothing with it you would have $11,912 worth of crypto today. But if instead you had exchanged it for LTC you would have $2,685 worth of crypto today, because the value of LTC has fallen to less than a quarter of its all time high.

LTC was a great coin back in 2013/2014 because it was the first major altcoin after BTC became unmineable on GPUs and it managed to position itself as the silver to BTC's gold, but it's day has long passed. The likes of Ethereum, Dash, Zcash, etc have long since surpassed it.
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