Bitcoin Is Still Basically Useless for Making Payments

Steam stops supporting bitcoin as a mode of transaction

Bitcoin continued to rise in value this week and looks set to break the $15,000 barrier soon.

Bitcoin's network is struggling to keep up with the number of transactions that are being processed, pushing up transaction fees as miners prioritize transactions which pay a higher fee.

One of those companies is Valve, which up until today accepted Bitcoin as a payment method on Steam.

Valve said that the degree of volatility in bitcoin value "has become extreme in the last few months, losing as much as 25% in value over a period of days".

It was in April 2016 that Steam, operated by game developer Valve, confirmed a long-rumored move by accepting bitcoin through a partnership with payment processing BitPay.

Along with Bitcoin's skyrocketing valuation, transaction fees charged to customers have also risen dramatically, from the 20 cents when the company enabled Bitcoin support two years ago to $20 last week, Valve said in a blog post.

"These fees result in unreasonably high costs for purchasing games when paying with Bitcoin".

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The problem stems from the fact that Bitcoin's value is guaranteed only for a short time when making purchases with the cryptocurrency.

Both situations mean the customer is again hit by the Bitcoin transaction fee, and the company said it's seen an increase in users falling into that predicament - resulting in underpayment.

"At this point, it has become untenable to support Bitcoin as a payment option."
Since it's changing so quickly on a regular basis, Valve has been finding that Bitcoin's value from when a transaction was started and a transaction completes can be "significantly different".

When a Steam customer paid with Bitcoin, they would transfer a certain amount for the cost of the game and then another amount to cover the fee.

Steam's blog post adds that the platform usually solved the problem by either refunding users, or asking them to transfer additional funds to cover the remaining balance. That may sound like an improbable scenario but as Coindesk reported earlier today, Bitcoin's value recently surged by more than $1000 in just 24 hours-and Valve said that "we've seen increasing numbers of customers get into this state" this year.

For Valve, the answer to its Bitcoin problem is no more Bitcoin. "We may re-evaluate whether Bitcoin makes sense for us and for the Steam community at a later date", the post adds.

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