Cryptocurrency strikes again
The price of Bitcoin is currently soaring. When the same happened with Ethereum earlier this year, it led to soaring graphics card prices, as miners bought up all the hardware they could find. Bitcoin's price flux could mean graphics cards are about to get scarce again.
Less than two years after adopting Bitcoin as a payment option on Steam, Valve has announced that it is dropping support for the virtual currency. The decision to eliminate the option comes as a result of both the extremely high transaction fees charged by Bitcoin, and recent, also-extremely-high levels of instability in its value.
"In the past few months we've seen an increase in the volatility in the value of Bitcoin and a significant increase in the fees to process transactions on the Bitcoin network. For example, 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)," Valve explained.
"These fees result in unreasonably high costs for purchasing games when paying with Bitcoin. The high transaction fees cause even greater problems when the value of Bitcoin itself drops dramatically."
Bitcoin valuation has become a problem recently as well, as the value fluctuates wildly over very short spans of time. Bitcoin values are only guaranteed for a certain window of time, and if for some reason a transaction isn't completed within that window, the amount required to complete the purchase can change. 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.
Normally when this occurs, Valve will either refund the overpaid amount or require additional funds to cover the shortfall, but in both cases the customer has to eat yet another Bitcoin transaction fee. "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)," Valve wrote.
All of that makes the continued support of Bitcoin "untenable," and thus it is out. Valve said it may be brought back at some later date, presumably when (or if) it stabilizes, but at least one economist believes that stabilization will come in the form of a crash, which may make it a moot point anyway.