The Fintech Effect

Gaming platform Steam ditches bitcoin support, citing 'high fees and volatility'

Key Points
  • Steam says it will no longer support the cryptocurrency due to its "high fees" and "volatility."
  • Bitcoin's price rocketed past $14,000 Wednesday
Gabe Newell, right, co-founder of video game developer and distributor Valve.
Ethan Miller | Getty Images

Gamers can no longer pay with bitcoin on the gaming platform Steam.

Steam, which is owned by developer Valve Corporation, said in a blog post Wednesday that it could no longer support the virtual currency because of its "high fees" and "volatility".

"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," Steam said.

All bitcoin transactions are recorded on a huge decentralized record of transactions known as the blockchain.

To keep the network ticking, voluntary bitcoin "miners" have to work out complex mathematical solutions to add a transaction to the distributed ledger. In return for their ongoing maintenance of the network, miners are paid transaction fees.

The average transaction fee currently costs $7, according to data from BitInfoCharts. And data shows that miners have made more than $3 million dollars in transaction fees.


Steam said that volatility was another factor in the service's decision to drop bitcoin payment support.

Recently, the digital currency has surged to record highs well above $10,000. But there have been times when bitcoin's price has dropped significantly, raising concerns about its viability as a currency.

"The value of bitcoin is only guaranteed for a certain period of time so if the transaction doesn't complete within that window of time, then the amount of bitcoin needed to cover the transaction can change," Steam said.

"The amount it can change has been increasing recently to a point where it can be significantly different."