"At this point, it has become untenable to support Bitcoin as a payment option", Valve said. According to the company, the reason for dropping Bitcoin is twofold: volatility is a concern, as are the rising cost of transactions fees on the Bitcoin network.
Valve's popular gaming and digital distribution platform Steam started accepting bitcoin payments back in April 2016, when the cryptocurrency was trading at about $450. Valve announced the news in a post to the Steam Blog today.
Bitcoin's recent rise in value has made some of its investors rich, most notably the Winklevoss twins who bought $11 million of the cryptocurrency when each coin was valued at $120.
Bitcoin valuation has become a problem recently as well, as the value fluctuates wildly over very short spans of time.
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. With Valve unable to control these blockchain-linked costs (passed on from third-party Bitpay), the company anxious that it was leading to "unreasonably high costs for purchasing games when paying with Bitcoin" (though apparently these are costs Bitcoin users as a whole have been willing to shoulder of late).More news: 'Today' show rules in ratings after Lauer gets canned
It said that fees to process Bitcoin payments had "skyrocketed" in 2017, making the virtual currency much less attractive as an option. Over the last week alone, the price has gone from $9,500 for a single Bitcoin to over $13,000. "This creates a problem for customers trying to purchase games with Bitcoin".
"When checking out on Steam, a customer will transfer x amount of Bitcoin for the cost of the game, plus y amount of Bitcoin to cover the transaction fee charged by the Bitcoin network", the company said. "The amount it can change has been increasing recently to a point where it can be significantly different", the blog post reads.
There's no good customer service response to this problem, Valve added, because if there's an imbalance in payments the same problem can repeat itself, and users can be hit with additional transaction fees.
Various cryptocurrency enthusiasts attempted to get Valve to consider accepting other cryptocurrencies as an alternative to bitcoin. However, the post did end by stating that Steam may re-evaluate Bitcoin in the future and decide then whether or not it is suitable for the company and its community.