Steam removed bitcoin because half of transactions were fraudulent

[hugeblack]

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,"

"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.

Source --> https://www.pcgamer.com/uk/50-of-transactions-were-fraudulent-when-steam-accepted-bitcoin-for-payments-says-gabe-newell/



In the end he concluded by saying that it is not something we want to do, but we are forced because we do not want to enable the corruption of large numbers of our customers It's the weirdest excuse to stop accepting bitcoin, even stranger than environmental and sustainability issues.

[suchmoon]

I don't know how irreversible transactions could be fraudulent, there should be no fraud compared to credit cards. They were either doing something horribly wrong (like zero confirmations) or are blaming unrelated problems on Bitcoin.

The price complaint makes no sense either. There is no way Bitcoin went up or down tenfold in a day in 2016. I don't know if fees were anywhere near $100 at any point, but if they failed to communicate to their users how Bitcoin works and made it look like game prices are going up and down - that's on them.

[OmegaStarScream]

I don't know how irreversible transactions could be fraudulent, there should be no fraud compared to credit cards. They were either doing something horribly wrong (like zero confirmations) or are blaming unrelated problems on Bitcoin.

Yes, they were actually accepting 0 confirmations transactions at some point: https://themerkle.com/steam-switched-back-to-zero-confirmation-bitcoin-transactions/

[BitMaxz]

I search a bit and saw some articles about the issue on steam and yes they do accept bitcoin with 0 confirmation which is a mistake accepting bitcoin without knowing about double spend.

They should only accept transactions with 3 confirmations and like suchmoon said there should be no fraud happen.
There might be other reasons why they stop accepting Bitcoin

[mk4]

Yes, they were actually accepting 0 confirmations transactions at some point.

I search a bit and saw some articles about the issue on steam and yes they do accept bitcoin with 0 confirmation which is a mistake accepting bitcoin without knowing about double spend.

For Steam/Valve technically being a business in the technology sector, and knowing that Steam/Valve wasn't some small crappy business back then, that's such an amateur mistake lmao.

There might be other reasons why they stop accepting Bitcoin

Safe assumption that it's the fraud problem, and the lack of customer interest after a cycle crash.

[stompix]

Yes, they were actually accepting 0 confirmations transactions at some point.

Wait a minute, so because the rain comes in if I leave the window open would I just wall it up all of it?
Seriously, that was the problem? It seems beyond stupid!

Let's assume they couldn't figure out how to implement a 3 blocks confirmation, but couldn't they just make payments available only after you have used a card, no way somebody with a CC on file and who has spent real money before will try this trick unless he is crazy.
This is one pathetic excuse.

Blame high fees, blame lack of interest, blame legislation but not this!

[dkbit98]

In the end he concluded by saying that it is not something we want to do, but we are forced because we do not want to enable the corruption of large numbers of our customers It's the weirdest excuse to stop accepting bitcoin, even stranger than environmental and sustainability issues.

I don't understand how this Gabe dude can say Bitcoin transactions were fraudulent, and in same time he claims fees could go very high making game prices go from $10 to $100 in Bitcoin.
There is no fraud in that at all. and if they wanted to save on fees they could just use Lightning Network payments and pay almost zero fees.
I would ask him is it fraud when (hyper)inflations kicks-in and when prices of games and everything else go sky high?

[PX-Z]

Yes, they were actually accepting 0 confirmations transactions at some point.

I search a bit and saw some articles about the issue on steam and yes they do accept bitcoin with 0 confirmation which is a mistake accepting bitcoin without knowing about double spend.

For Steam/Valve technically being a business in the technology sector, and knowing that Steam/Valve wasn't some small crappy business back then, that's such an amateur mistake lmao.

Plus, considering they have these professional team with lots of knowledge even a simple research on how to make bitcoin transaction secure will give them idea that this idea will make their business a hard time. And its a shock its one of the reasons why they stop accepting bitcoin.

[Darker45]

50% is most probably just an exaggeration. Just like the statement "a game could cost $10 one day and $100 the next." These are all hollow statements. They are doing a proper business, perhaps they could also cite valid and solid reasons. For now, these appear simply as excuses.

I don't know what's their real issue with Bitcoin but fuzzy statements like "a lot of the actors who are in that space are not people you want interacting with your customers" and "we had problems when we started accepting cryptocurrencies as a payment option." They're not stating facts here. Anyway, it's always their choice.

[ultrloa]

Yes, they were actually accepting 0 confirmations transactions at some point.

I search a bit and saw some articles about the issue on steam and yes they do accept bitcoin with 0 confirmation which is a mistake accepting bitcoin without knowing about double spend.

For Steam/Valve technically being a business in the technology sector, and knowing that Steam/Valve wasn't some small crappy business back then, that's such an amateur mistake lmao.

Plus, considering they have these professional team with lots of knowledge even a simple research on how to make bitcoin transaction secure will give them idea that this idea will make their business a hard time. And its a shock its one of the reasons why they stop accepting bitcoin.

Maybe they really don't know on how to describe the issues they face upon using bitcoin or adopting it to the platform this is why they released a unreliable reasons for eliminating bitcoin on their platform.

Maybe volatility is really the main issue here and the other thing is those peoples who always do fraudulent actions towards a certain company and victimized on their false claims.

[dothebeats]

They had Bitpay back then, how would bitcoin payments be fraudulent if you already have a third party payment processor which converts your profits to USD? They shouldn't have allowed users to spend money after 0 confirmations and instead required at least 3 (which they also did). Anyway, perhaps the reason they removed bitcoin into their payment methods isn't because of fraud but rather something else. They are still a legit business raking millions of dollars per month and I think compliance and regulatory issues were one of those problems they cannot fix themselves.

[boyptc]

I had remembered them when they have adopted bitcoin for payments but unfortunately, I wasn't able to purchase and enjoy that feature when it was still there.

They had Bitpay back then, how would bitcoin payments be fraudulent if you already have a third party payment processor which converts your profits to USD? They shouldn't have allowed users to spend money after 0 confirmations and instead required at least 3 (which they also did). Anyway, perhaps the reason they removed bitcoin into their payment methods isn't because of fraud but rather something else. They are still a legit business raking millions of dollars per month and I think compliance and regulatory issues were one of those problems they cannot fix themselves.

This is what I'm thinking. I think this is just an excuse from GabeN and he's not really optimistic of using bitcoin for payments through his platform, steam.

Despite the option that they can use 3rd party service like Bitpay, they can fix that worry that they have but they chose not to.

[Potato Chips]

I doubt they were really concerned about mass frauds, otherwise the steam gift cards which is most used for it would've gotten the same treatment.

[pooya87]

The whole article is contradiction inside contradiction.
1. Steam was using BitPay which means they had (and probably used) the option to convert bitcoin immediately to fiat and not even face the volatility issue that he is complaining about. In other words he is complaining about something his company never even experienced!
2. It's been 5 years and so far the only thing that I've heard about was that Steam stopped accepting bitcoin because the fees were higher than the cost of a lot of their games. How come he is coming out with this new information now?!!
3. Again Steam was using BitPay so if anything BitPay was responsible for blocking "fraudulent" payments and they shouldn't have received any of them in first place, let alone 50% of their received payments to be "fraudulent".
4. Finally, I'd say Steam should be prosecuted because they are claiming they knowingly accepted fraudulent money and lots of it for over a year too

[uneng]

I don't know how irreversible transactions could be fraudulent, there should be no fraud compared to credit cards. They were either doing something horribly wrong (like zero confirmations) or are blaming unrelated problems on Bitcoin.

Yes, they were actually accepting 0 confirmations transactions at some point: https://themerkle.com/steam-switched-back-to-zero-confirmation-bitcoin-transactions/

That is an absurd situation! But shows they don't have any interest in bitcoin at all, otherwise they would have hired a specialist to help them introduce bitcoin payment method safely for both sides.

I though they would consider fraudulent transactions the fact the money may come from unknown or illegal sources, but the truth was something more insane.

Steam doesn't know how to use the "tool" and instead of learning how to do this, they claim the tool doesn't work.

[pooya87]

That is an absurd situation! But shows they don't have any interest in bitcoin at all, otherwise they would have hired a specialist to help them introduce bitcoin payment method safely for both sides.

I though they would consider fraudulent transactions the fact the money may come from unknown or illegal sources, but the truth was something more insane.

Steam doesn't know how to use the "tool" and instead of learning how to do this, they claim the tool doesn't work.

The absurdity of this situation is that the other payment methods they use (PayPal and credit cards) are known for having maximum number of frauds. So I bet there are more fraudulent transactions coming to Steam every month through those methods than there has ever been processed by bitcoin in the past 13 years as a whole.