Video gamers can no longer purchase their favorite video games using bitcoin as currency on the Steam gaming network. The platform’s owners Valve Software confirmed that, following a period of significant volatility in the value of bitcoin pre-Christmas, it is no longer feasible for gamers to use bitcoin to cover payments for games as well as transaction fees charged by the bitcoin network.
Valve confirmed in a blog post that bitcoin transaction fees alone had risen by $20 per purchase, compared to around $0.20 when the platform initially accepted bitcoin payments for video game downloads. The transaction fees have always been shouldered by customers purchasing games on the Steam network and the overall cost to purchasers could rise still if the value of bitcoin falls during their purchase. Furthermore, if bitcoin values were to rise during a transaction, Steam has been duty bound to refund the difference to each customer and customers must pay the transaction fee again to receive their refund.
The volatility in the value of bitcoin has created an investment asset that is now tradeable by retail and day traders via bitcoin exchanges. Bitcoins.net describes the concept of bitcoin exchanges, which allow individuals to buy and sell their bitcoin on a platform, with a service fee charged for each purchase. It also discusses the concept of peer-to-peer bitcoin exchanges that are decentralized and anonymous, making it impossible to lose digital assets or information despite the prospect of lower liquidity than with a regular bitcoin exchange.
In April 2016, when Valve first started accepting bitcoin as a form of payment, the value of bitcoin was trading at around $450 on bitcoin exchanges. Fast forward to the present day and each bitcoin is currently worth upwards of $14,000. The Steam network has intimated that it could reverse its decision in the future, particularly if the volatility surrounding the cryptocurrency disappears, saying: “We may re-evaluate whether bitcoin makes sense for us and for the Steam community at a later date.”
The news that video gamers are now unable to use their bitcoin to purchase games from one of the world’s leading online gaming platforms does not appear to have impacted on the value of bitcoin but one of the key factors in the digital currency’s decline over the festive season was the South Korean government’s statement of intent to clamp down on cryptocurrencies after a high-profile digital currency exchange in the nation’s capital, Seoul, was hacked and forced into closure.
A new report from theguardian.com says that the South Korean government issued a press release stating it had “warned several times that virtual coins cannot play a role as actual currency” and individuals could experience severe losses due to the digital asset’s extreme volatility. South Korea is one of the world’s biggest markets for bitcoin trading, with a fifth of all transactions reportedly completed here. Nevertheless, the government has confirmed it will be banning the opening of anonymous cryptocurrency accounts and introducing new legislation to enable financial regulators to shut down exchanges if they believed it was right to do so.