Business 7 December 2017Jasmine Solana
Steam ditches ‘untenable’ BTC as transaction fees tops $20
The popularity of SegWit1X (BTC) as a payment option has run out of steam—pun intended—with online gaming shop Valve Corp.
On Wednesday, Valve announced that its video gaming platform, Steam, will no longer accept BTC as a payment option. The reason: high fees and the volatility in the value of the cryptocurrency.
BTC has been one of Steam’s alternatives to traditional payment methods since April 2016, but Valve said the digital currency’s surging transaction fees have resulted in high costs for customers. For instance, fees on the Bitcoin network reached $20 per transaction last week, compared with the roughly 20 cents when Valve first enabled cryptocurrency-related payments, according to the company.
“Unfortunately, Valve has no control over the amount of the fee. These fees result in unreasonably high costs for purchasing games when paying with [BTC]. The high transaction fees cause even greater problems when the value of [BTC] itself drops dramatically,” Valve said in a blog post.
The announcement comes on the heels of BTC’s recent price rally. The cryptocurrency notched a new record high on Thursday, trading at above $15,200 level with a market capitalization of over $255.21 billion, according to CoinMarketCap data. Bitcoin Cash (BCH), meanwhile, is trading at $1,300 level with close to $23 billion market capitalization and an average transaction fee of $0.16.
Cheap transactions have been one of BTC’s biggest selling points, but that was in the past—when one BTC cost tens or hundreds of dollars. Currently, the network’s transaction capacity remains “artificially limited, and it is causing miners to prioritize transactions, which, in turn, forces users to compete and outbid each other. This is why the cryptocurrency—despite growing in value—is barely usable for micro-transactions.
In Steam’s case, the surge in BTC’s price and network transaction fees is causing headache for both the customers and the company. Valve said the cryptocurrency’s current “extreme” volatility, users either need to transfer additional funds to cover the remaining balance of their transaction or opt to have their original payment refunded. Either way, users will have to pay the BTC network transaction fee again.
“This year, we’ve seen increasing number of customers get into this state. With the transaction fee being so high right now, it is not feasible to refund or ask the customer to transfer the missing balance (which itself runs the risk of underpayment again, depending on how much the value of Bitcoin changes while the Bitcoin network processes the additional transfer),” according to Steam.
For Valve, the solution to this problem is simple: ditch BTC. The company, however, promised to “re-evaluate whether [BTC] makes sense for us and for the Steam community at a later date.”
Now that BTC is becoming more and more expensive to spend, what is left for the cryptocurrency? Well, BTC and its chain can still be used as an institutional value transfer system, although it will be an inefficient one compared to BCH, which is considered the only Bitcoin variant that remains true to the original vision of Satoshi Nakamoto.
Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper. Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.
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