Bitcoin (as of the time this article was written) was valued at more than $16,000 per unit, so perhaps there is no value going out of this bubble anytime soon. But the team at game distribution platform Steam has decided that bitcoin is a bit rich for its blood these days — and thus, they will no longer accept bitcoin transactions.
“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,” the company wrote. “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).”
As they cannot control those fee costs, the company says it can no longer support bitcoin, since the 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.”
The problems on Steam are indicative of the greater difficulty of bitcoin functioning as a currency. Consumers have no reason to pay more for the same good using bitcoin when they could pay less with dollars. And, because bitcoin jumps in price — and drops — so rapidly, it’s hard to say if one got a “good buy,” since by midafternoon the same number of bitcoin would have bought a lot more (or less).
Moreover, bitcoin’s price has increased by several thousand dollars over the last week alone — if one were not inclined to believe it a bubble, there would be no sane reason to spend that bitcoin when it could be worth a lot more in a week, when a dollar (pound or euro) will be worth about the same.
And, if you think bitcoin’s long-term value will grow, then why use it on this purchase?
But there was some good news from Steam for bitcoin-enthused video gamers: “We may reevaluate whether bitcoin makes sense for us and for the Steam community at a later date.”