Valve President Explains Why They Removed Bitcoin As a Payment Method on Steam

Recently, Gabe Newell, Co-Founder and President of video game company Valve Corporation, the developer of the software distribution platform Steam, explained why his firm had to stop accepting Bitcoin as a payment method on Steam.

Steam is “a video game digital distribution service by Valve” that was “launched as a standalone software client in September 2003 as a way for Valve to provide automatic updates for their games, and expanded to include games from third-party publishers.” It has “also expanded into an online web-based and mobile digital storefront.”

According to a report by PC Game, “Bitcoin was introduced as a payment method on Steam in April 2016” and according to Valve, it was removed in December 2017 “due to the volatility of Bitcoin’s price and ‘a significant increase in the fees to process transactions on the Bitcoin network’.”

Last October, Valve has quietly updated its guidelines for game developers to include a new crypto-related rule. The “Onboarding” section of the Steamworks documentation had a new rule (#13) that stated games developers should not publish on Steam “applications built on blockchain technology that issue or allow exchange of cryptocurrencies or NFTs”.

According to a report by The Verge, this change was first pointed out on October 14 by the developer of an NFT-based game (“Age of Rust”), which he says was removed from the Steam platform because of this new rule.

Around two weeks, Wes Fenlon, a report for PC Gamer, asked the Valve President to share his thoughts on crypto.

Newell told Fenlon:

“The problem is that a lot of the actors who are in that space are not people you want interacting with your customers… We had problems when we started accepting cryptocurrencies as a payment option. 50% of those transactions were fraudulent, which is a mind-boggling number. These were customers we didn’t want to have.“

“There’s a lot of really interesting technology in blockchains and figuring out how to do a distributed ledger, [but] I think that people haven’t figured out why you actually need a distributed ledger…

“There’s a difference between what it should be and what it really is currently in the real world. And that’s sort of where we were at with the blockchain-based NFT stuff: so much of it was ripping customers off. And we were like, ‘Yeah, that’s not what we want to do, we don’t want to enable screwing large numbers of our customers over,’ so that’s what drove that decision. There’s nothing inherently about distributed ledgers that makes them problematic. It’s just so far that’s almost always what our experience has been.“

Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

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