In the past few periods, we’ve seen an escalation in the volatility in the state of Bitcoin and a notable increase in the fees to process activities on the Bitcoin network. For instance, transaction fees that are accredited to the customer by the Bitcoin system have skyrocketed this year, excelling out at close to $20 a trade last week compared to unevenly $0.20 when we initially enabled Bitcoin. Unfortunately, Valve has no handle on the amount of the fee. These fees appear in irrationally high costs for buying games when paying with Bitcoin. The high purchase fees cause even greater problems when the value of Bitcoin itself drops dramatically.
Historically, the value of Bitcoin has been unpredictable, but the degree of volatilization has become extreme in the last few months, falling as much as 25% in value over a period of days. This creates a puzzle for customers trying to purchase games with Bitcoin. When reviewing out on Steam, a customer will transfer x amount of Bitcoin for the cost of the game, plus y amount of Bitcoin to hide the transaction fee charged by the Bitcoin network. The purpose of Bitcoin is only guaranteed for a definite period of time so if the transaction doesn’t finish within that window of time, then the price of Bitcoin needed to cover the transaction can change. The price it can change has been expanding recently to a point where it can be significantly different.
The normal determination for this is to either refund the quick payment to the user or ask the user to transfer extra funds to cover the left balance. In both these cases, the user is hit with the Bitcoin network transaction fee again. This year, we’ve seen building number of customers get into this state. With the transaction fee being so high right now, it is not likely to refund or ask the customer to transfer the lacking balance which itself runs the risk of underpayment again, depending on how much the use of Bitcoin changes while the Bitcoin network prepares the additional transfer.
At this point, it has become unreasonable to support Bitcoin as a payment option. We may re-evaluate whether Bitcoin makes insight for us and for the Steam association at a later date.