'50% of transactions were fraudulent' when Steam accepted Bitcoin for payments, says Gabe Newell
No wonder Steam stopped taking cryptocurrency.
Steam wasn't on the Bitcoin train for long. Bitcoin was introduced as a payment method on Steam in April 2016 and 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," Valve wrote at the time. More recently Valve raised the ire of crypto fans by banning crypto and NFT games from the store. Last week while talking to Valve president Gabe Newell about the Steam Deck, I also asked about that rule and his take on cryptocurrency in general.
Turns out: Not a fan, at least when it comes to Steam.
"The problem is that a lot of the actors who are in that space are not people you want interacting with your customers," Newell said. "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."
Newell reiterated that Bitcoin's fluctuations were "a complete nightmare"—people weren't happy when a game could cost $10 one day and $100 the next.
His opinion hasn't changed with the recent rise of crypto games and NFTs.
"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," Newell said.
"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."