Steam drops bitcoin citing $20 transaction fees

Andrew Munro 7 December 2017 NEWS

bitcoin

A tipping point?

Steam first announced that it was accepting bitcoin in April 2016. Back then, bitcoin was worth around $415 and transaction fees tended to hover around the US$0.20 mark.

But today it announced an end to that, citing transaction fees that are topping out around US$20. To make matters worse, customers have also been getting hit with multiple transaction fees on a single purchase.

This seems to be due to extreme bitcoin price volatility of late, and increasingly unpredictable transaction times.

Steam's usual procedures appeared to cater to the volatility by guaranteeing the value of bitcoin for a few days. Customers would simply transfer the cost of the game plus the transaction fee at a locked in price. This gave Steam time to process payments at the original value.

But in the event of especially big price changes, Steam would either refund the difference (if the price of bitcoin increased) or ask the customer to make a top-up payment (if the price of bitcoin decreased). In both cases, the once-negligible transaction fees would be at the customer's expense.

Pay $40 in transaction fees to buy a $20 game

Steam isn't the first company to drop bitcoin in the face of big transaction fees. The now-ironically-named micro-transaction platform SatoshiPay did it back in July 2017, dropping Satoshi's bitcoin blockchain and partnering with IOTA instead.

But Steam is probably the biggest name to drop bitcoin to date, at a time when many others are rushing to pick it up.

Steam is well known for its periodic sales that slash the price of AAA games by up to 50%, plus its range of thousands of indie games that might go running from 99c to $10. The biggest seller in recent months, PlayerUnknown's Battlegrounds has been going for about $29.

Most would argue that it's naturally not tenable to run with transaction fees that cost more than the games themselves.

The scaling problem has been chafing bitcoin's blockchain for a while but has apparently gone largely ignored. In many cases, the community has even opposed efforts to try and solve it. But with more merchants dropping bitcoin, the problem (and the transaction fees) are getting too large to ignore.


Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Cryptocurrency news

Latest crypto guides

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.
Ask a question
Go to site