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Bitcoin Businesses

Steam Ends Support For Bitcoin (polygon.com) 151

Valve is ending support for Steam purchases made with bitcoin, the company said today, citing "high fees and volatility" in the value of the cryptocurrency. In a statement, it said: "In the past few months we've seen an increase in the volatility in the value of Bitcoin and a significant increase in the fees to process transactions on the Bitcoin network," Valve said in a post on Steam. "For example, transaction fees that are charged to the customer by the Bitcoin network have skyrocketed this year, topping out at close to $20 a transaction last week (compared to roughly $0.20 when we initially enabled Bitcoin). Unfortunately, Valve has no control over the amount of the fee. These fees result in unreasonably high costs for purchasing games when paying with Bitcoin. The high transaction fees cause even greater problems when the value of Bitcoin itself drops dramatically."

Steam Ends Support For Bitcoin

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  • by e r ( 2847683 ) on Wednesday December 06, 2017 @04:11PM (#55690659)
    They're no longer accepting BTC so that they're not stuck holding the bag after the bubble pops-- which will be any day now it looks like.
    • The problem is that people have been saying that for a long time, and yet the price just keeps going on. I was expecting the bubble to pop several times now, and in fact it sorta had, but then the price very quickly shot even higher than it was before that pop.

      I just don't get it. Bitcoin is no longer useful even as a currency due to the transaction fees and transaction times involved. It strikes me to being a very high-stakes version of collecting Magic the Gather or Pokemon cards.

      • The problem is that people have been saying that for a long time, and yet the price just keeps going on. I was expecting the bubble to pop several times now, and in fact it sorta had, but then the price very quickly shot even higher than it was before that pop.

        I just don't get it. Bitcoin is no longer useful even as a currency due to the transaction fees and transaction times involved. It strikes me to being a very high-stakes version of collecting Magic the Gather or Pokemon cards.

        It is possible a few players are driving volatility to make money off of the swings. The can make money on the movement and if they can move enough to spike prices, from a quick glance it looks like that may have happened on 12 Nov.

        • How cute, slashdoters dont know about Theter.

          BTC is being pumped by some actors literally printing Virtual USD and buying coin with them. This to keep luring clueless investors. Tech wise BTC is not worth $100 USD even. It's all make believe store of value and corporate shilling.

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        “The market can stay irrational longer than you can stay solvent.”
        —John Maynard Keynes

      • by Anonymous Coward

        You're right; you don't get it.

        Everyone talking "tulips" is imagining this bull market is fueled by western investors looking to make a quick buck. And sure, they exist, but nobody wants to talk about the Venezuelan bitcoin miner using government subsidized electricity to earn enough just to buy food, or the guy in Zimbabwe trying to hide the last of his wealth from the state. That money isn't going to leap back into fiat currencies any time soon.

        • It can be moved into other cryptocurrencies. Ethereum and Burstcoin come to mind. There is always room for a "Bitcoin 2.0" as well, something designed to fix the problems that BTC has encountered.

          Of course, the problem is that the world pretty much speaks only Bitcoin as a common cryptocurrency, maybe a little bit of Ethereum. So, a lot of transactions would be moving back and forth between those two in order to get a good or service purchased.

          • Yep, there's always another Ponzi scheme to more to.

          • It can be moved into other cryptocurrencies. Ethereum and Burstcoin come to mind.

            But when Bitcoin collapses, probably at a time of high transaction volume when the verification time suddenly stretches into weeks so that nobody knows who owns what, there will be little sentiment for piling into another cryptocurrency. Instead, those who cash out will go into something like gold or Swiss francs.

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        The problem is that people have been saying that for a long time, and yet the price just keeps going on.

        That's why it's called a bubble.
        If it fluctuated more reasonably, we wouldn't call it a bubble.

      • stock market with no government regs and insider trading is ok if you can get to over 51% cpu power.

      • Do you know why it's gone up and is still going up? Do you understand how market commodities like bitcoin develop price and what the interactions of buying and selling are to the value? Do you have understanding of the precedent of what happens to commodities like this which have appreciated greatly and then start dropping even a little?

        If you did you would understand the skeptics and the comparisons to tulips and stock markets.

        • The answer is no to all of those questions, so if you have any links to some quick and dirty articles so that I can at least get a basic idea of what I'm looking at, it would be greatly appreciated.

  • Questions (Score:4, Interesting)

    by SmaryJerry ( 2759091 ) on Wednesday December 06, 2017 @04:13PM (#55690673)
    Why does a transaction take so long and why does it cost $20? If someone is only transferring $5 American dollars worth of bitcoin would it still cost $20 in transaction fees?
    • Re:Questions (Score:5, Interesting)

      by Train0987 ( 1059246 ) on Wednesday December 06, 2017 @04:20PM (#55690729)

      Yes, that's always been one of many fatal flaws with the bitcoin pyramid scheme, errr, blockchain.

    • Re:Questions (Score:5, Informative)

      by vossman77 ( 300689 ) on Wednesday December 06, 2017 @04:23PM (#55690757) Homepage

      The recommended fee is 0.000339 BTC or about $4.41 at current values [1]. Fee are the same if you are transferring less than a US penny or more than a million dollars. For any transaction, you can use less fee and wait (much) longer or a larger fee have a shorter transaction time.

      Fees have really been the driving force behind the recent Bitcoin forks. Some argue that bitcoin should be a store of value (not me) rather an a tool for transferring money. Independent of your opinion on the fork Bitcoin Cash, I believe they are doing it right with transaction fees [2], which currently is about $0.15 per transaction, again independent of transaction amount.

      1. https://bitcoinfees.earn.com/ [earn.com]
      2. https://bitinfocharts.com/comp... [bitinfocharts.com]

      • Wait, I'm confused about something here. Isn't the $20 figure cited by the article basically just a current market value threshold set by the main currency miners/transactors on line at the time? In theory at least, couldn't this high transaction cost be dropped or nullified completely by a flood of smaller independent miners/transactors coming online who all just agree to not charge anything for transactions? Or is there something inherent to the way the software is written that requires all transaction

        • Re:Questions (Score:5, Interesting)

          by vossman77 ( 300689 ) on Wednesday December 06, 2017 @09:16PM (#55692495) Homepage

          Based on my limited understanding, the block size is fixed at 1MB and each transaction is around 226 bytes. A block occurs every 20 minutes, so bitcoin can only have about 232 transactions per minute, and transactions are (some how) prioritized by age and fee. It is well known the miners will flood the transaction back log to increase the fees, because the miners claim the additional fees.

          SegWit, which went into effect in August (?), I think was supposed to reduce the transaction size, but keep the block size the same. SegWit also allows some sort of Lightning Network, which is basically a service that will confirm transaction off of the block chain faster for a higher fee. The Bitcoin Cash people rejected this as being too proprietary and hence their fork.

          The fork Bitcoin2X a.k.a. SegWit2X increased the block size to 2MB.

          I am not sure what Bitcoin Cash did, but as stated they rejected SegWit, and must have increased the block size, but they are handling the increased transaction volume fine.

          AFAIK, all other Bitcoin forks (Gold, Platinum) are money grabbing schemes.

          • A block occurs every 20 minutes,

            10 minutes

            SegWit also allows some sort of Lightning Network, which is basically a service that will confirm transaction off of the block chain faster for a higher fee

            Lower fee

            I am not sure what Bitcoin Cash did, but as stated they rejected SegWit, and must have increased the block size, but they are handling the increased transaction volume fine.

            What increase in transaction volume? People are only selling
          • by cyn1c77 ( 928549 )

            Based on my limited understanding, the block size is fixed at 1MB and each transaction is around 226 bytes. A block occurs every 20 minutes, so bitcoin can only have about 232 transactions per minute, and transactions are (some how) prioritized by age and fee. It is well known the miners will flood the transaction back log to increase the fees, because the miners claim the additional fees.

            SegWit, which went into effect in August (?), I think was supposed to reduce the transaction size, but keep the block size the same. SegWit also allows some sort of Lightning Network, which is basically a service that will confirm transaction off of the block chain faster for a higher fee. The Bitcoin Cash people rejected this as being too proprietary and hence their fork.

            The fork Bitcoin2X a.k.a. SegWit2X increased the block size to 2MB.

            I am not sure what Bitcoin Cash did, but as stated they rejected SegWit, and must have increased the block size, but they are handling the increased transaction volume fine.

            AFAIK, all otherhttps://slashdot.org/story/17/12/06/2058224/steam-ends-support-for-bitcoin?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Slashdot%2Fslashdot+%28Slashdot%29# Bitcoin forks (Gold, Platinum) are money grabbing schemes.

            As someone who doesn't follow Bitcoin Cash closely, I initially wondered why this post wasn't modded "Funny".

            Then I realized that it wasn't a joke and that all the jargon in there was real!

            Then I realized what is preventing Bitcoin from actually going mainstream.

    • Re: (Score:3, Informative)

      by Anonymous Coward

      In order for the transaction to be confirmed, it must be cryptographically linked into the blockchain. This occurs when a new bitcoin is "mined", and added to the blockchain. At that point, 1MB of transaction data can be recorded in the blockchain with the new bitcoin. To incentivize inclusion of your transaction, you can offer a portion of your bitcoin as a "fee" to record the transaction. This competes with all of the other pending transactions, so the higher the fee, the faster your transaction will be c

    • Obviously you make money on volume. :P
    • Funny, I can hand a dude paper cash, or incur a ~2% hidden credit card fee with current archaic cash dollars. Why is Bitcoin better again?

      • by Jeremi ( 14640 )

        Funny, I can hand a dude paper cash, or incur a ~2% hidden credit card fee with current archaic cash dollars. Why is Bitcoin better again?

        Have you calculated the hidden cash fee involved in reliably getting your paper cash to the dude when he isn't standing there next to you? Depending on your use case, Bitcoin might be cheaper than e.g. flying to China with an envelope full of bills.

      • by MrL0G1C ( 867445 )

        In the UK you can fast transfer money with 0% charge. Bitcoin sucks in so many ways.

      • I use coinbase and gdax. When I deposit money into coinbase, I transfer to gdax and do a limit buy just a bit higher than the current amount so it doesn't trigger the buy instantly. Free then.
        Selling and transferring to my account directly from gdax has been free all of the times I've done it. Not sure if the amount matters, though.

    • Re:Questions (Score:5, Informative)

      by kiminator ( 4939943 ) on Wednesday December 06, 2017 @06:51PM (#55691679)

      Bitcoin miners perform the processing required to process transactions. When a bitcoin transaction is submitted, it is submitted along with a "bid" for how much the person is willing to pay for the transaction. Miners then prioritize incoming transactions based upon how much is bid. If the bid is too low, it will end up at the end of a long queue and might take hours to finish (if ever).

      The optimal bid amount, then, is determined by the computing power of the Bitcoin network combined with how much processing power it actually takes to process each transaction and how many transactions there are. Right now, bids above about 150 Satoshis per byte (which works out to just under $5 per transaction on average at current prices) finish relatively quickly (typically under 30 minutes). Bids below that take an increasingly long time to commit.

      This high transaction cost is a function of the poor scaling of the Bitcoin algorithm to large numbers of transactions. It's one reason among many why I think Bitcoins are an absolutely abysmal medium of exchange, and why I question the entire concept of a blockchain-based currency system.

    • In the early days of bitcoin, blocks were cheap and easy to mine, and they saw that someone could cause problems for the network by mining huge blocks of junk transactions, just to cause problems. So they put a limit on the size that a block could be. Once mining became too expensive and hard for it to be done just to cause problems, this limit would be increased or just removed.

      The problem is, they didn't write the increasing of this limit into the code when they created it. Later on, some people, for re

      • by MrL0G1C ( 867445 )

        So, how does this affect the overall blockchain size? Do exchanges support this fork? Where can one view the current price of these?

        • by robbak ( 775424 )

          The blockchain will increases in size faster if blocks are larger, yes. We'd probably have blocks averaging about 3MB if the limit wasn't there, which would mean the blocksize would grow three times faster. (There is something called SegWit now active on the legacy chain that allows the effective blocksize to approach 2MB, but few people are using it, so the limit is still 1MB)

          Most exchanges are supporting the fork. You can buy Bitcoin Cash in most of the places you buy Bitcoin Core.

          Those same exchang

          • by MrL0G1C ( 867445 )

            So correct me if I'm wrong but in large part the reason bitcoin requires so much processing is in part because a team of people decide to increase the 'difficulty' every so often. Why don't they simply allow bitcoin to be 'easier'.

  • by Thelasko ( 1196535 ) on Wednesday December 06, 2017 @04:41PM (#55690917) Journal
    Currency should have a stable value compared to the rest of the goods in the marketplace. We typically see currencies fail due to rapid inflation. Where the currency loses value rapidly compared to the rest of the goods in the marketplace. This may be the first time we see a currency fail due to rapid deflation.
    • I do think it's a great experiment in economics. It would be nice if the information from this experiment could be used to create algorithms that can adjust the money supply without human intervention.

      I would suggest a repeat of this experiment with a much larger pool of coins, that are easier to mine. However, I fear the pool of coins would have to be infinite, and the resources consumed would be unacceptable.
      • >I do think it's a great experiment in economics.

        No, a pointless one. The ultimate outcome was obvious from the beginning to anyone with even a rudimentary understanding of economics and history.

        Perhaps it was a somewhat interesting experiment in implementing a Byzantine fault tolerance solution, but maybe not given that the problem was solved a decade before Bitcoin's genesis block was generated.

        >I would suggest a repeat of this experiment with a much larger pool of coins, that are easier to mine.

    • Deflation crises were common when currency was linked to precious metals. https://en.wikipedia.org/wiki/... [wikipedia.org]

      This was one of the reasons currency was eventually decoupled from gold and silver.

      • Deflation crises were common when currency was linked to precious metals. https://en.wikipedia.org/wiki/... [wikipedia.org]

        This was one of the reasons currency was eventually decoupled from gold and silver.

        I suppose the Bitcoin bubble is an extreme example of the advantages of fiat currency [wikipedia.org] over precious metals. By controlling the money supply, prices are stabilized.

    • Re: (Score:3, Informative)

      by kiminator ( 4939943 )

      Gold-based currencies had this problem, only Bitcoin's issue is far worse. Typically it's not so much that the currency fails as the economy it's based upon collapses due to deflation.

      This is part of the reason why the Great Depression was so bad, for instance. Japan has been struggling with deflation over the last couple of decades as well, resulting in a long period of economic stagnation. The smaller, poorer countries that share the Euro currency are also dealing with a deflationary problem right now.

    • posting to fix accidental mod.

    • Gold backed printed money. Hybrid of both problems. A fake money (paper) that represents a fixed money which is in reality (gold) Bitcoin is in reality; mathematically real despite not being physically real and it is fixed. The fact bitcoin is SLOW and not cheap to process does not mean anything more than it does for GOLD; which has to be processed to verify it too.

      I see people making lots of new coin pyramids but I've not seen any think about the 2-tier system we had with money for most of history in cr

      • Bitcoin is in reality

        Huh? In what way?

        Bitcoin has no intrinsic value whatsoever, so I don't see how it can be considered "real". It only has value because people are collectively deciding it does. In that respect, it's no different than printed money.

        • Math is not tangible but it's plenty real. 2+2 != 10 or 20 in a decade.

          Scarcity is the real point of this so lets limit discussion to that critical aspect:

          Bitcoin can not be inflated; it has a fixed limited amount. Intangible rules and math constraints in the definition.

          Gold has limited amounts and can not be inflated. Tangible constraints. (You can't go into space and get more gold... When that is possible, then it's scarcity would diminish and thereby the value in doing that.)

          Gold's practical use is not e

          • The math is irrelevant to my point. My point is that Bitcoin does not produce anything of tangible value at all. The only value it has is the value that people collectively agree that it has. If everyone agreed tomorrow that it has no worth, then it is completely without worth. Scarcity doesn't enter into it.

            In this respect, it is no different than fiat money.

            This is different from things with an inherent value. Gold, for instance, has a value regardless of people's attitudes about it because it has many pr

    • That's not a failing of the currency, that is basic economics. To stabilise a currency you need to peg it to something stable, and historically that is done through trading volumes. If bitcoin were used to purchase goods and services and if every day 10s of millions of dollars of bitcoin were converted back and forth into other currencies it would be very stable. The stability comes through use.

      It is failing for many other reasons, such as high transaction costs, but fundamentally the stability is not a fai

      • Currency stability is determined by two things
        1. Supply of the currency
        1. Demand for the currency

        That's it. If a lot of commerce was being done in Bitcoin, and the supply wasn't large enough, deflation would still be a problem. That's the advantage of Fiat money. The government backing it can add and remove from the money supply to stabilize prices.

        The value of a Bitcoin is increasing so rapidly, people don't want to spend them. That is a recipe for a failed currency.

        • No Supply and Demand determine the price, not the stability.

          Large volumes determine stability, that way a shift in supply and a shift in demand doesn't have such an effect on the price.

          • No Supply and Demand determine the price, not the stability.

            Right. That's what I meant. Stable supply and demand make a stable currency. Large trading volumes (I think that's what you mean) are typically an indicator of stability. However, prices can fluctuate wildly even on large trading volumes if supply and demand aren't matched.

            Stock markets typically trade in extremely large volumes, and they occasionally have times of extreme volatility. [wikipedia.org] (anything, including stocks can be considered currency if you think about it. Currency is just a social contract)

      • It is failing for many other reasons, such as high transaction costs, but fundamentally the stability is not a failure of bitcoin.

        The transaction barriers are certainly a big factor too. Currency is supposed to have high liquidity. The way transactions are processed are a major obstacle to liquidity.

  • Then use Dogecoin! It's been nearly worthless for most of its existence and paying a fee of one coin per transaction is more than fast enough.

  • Is there actual commerce happening with Bitcoin? That is, the exchange of goods and services for Bitcoin? Or is it all about mining a speculation? As in, it's valuable because people want it and people want it because it's valuable?
    • by Anonymous Coward

      "Is there actual commerce happening with Bitcoin?"
      Sure. You can hire a hitman and purchase drugs, guns, child porn, and stolen data. It also provides the means pay the ransoms to get your data unencrypted.

      • If this were true how is that IRS knows about all your BTC trades and is ready to fuck you once you try to cash out?

        2010 called and they want their meme back. Nobody uses BTC for the shit you mention. Bitcoin sucks hugely, believe me, but is not because of your handwringing and think of the kids stupidity.

    • Is there actual commerce happening with Bitcoin?

      That's the point of TFA. Valve no longer sees Bitcoin as a viable for commerce. In order for a currency to function, it's value has to be stable. Bitcoin is very unstable.

      If a currency no longer facilitates commerce, is it still a currency?

      • > If a currency no longer facilitates commerce, is it still a currency?

        That IS the question though:

        How many people need to use a currency before it is called a currency?

        2 ?
        3 ??
        ???

        Just because a currency has no value to me doesn't imply it isn't a currency for someone else.

        • Here's a definition, just for grins. It will give everybody more facts to argue about.

          Definition of currency
          plural currencies
          1 a : circulation as a medium of exchange
          b : general use, acceptance, or prevalence

          a story gaining currency

          c : the quality or state of being current : currentness

          needed to check the accuracy and currency of the information

          2 a : something (such as coins, treasury notes, and banknotes) that is in circulation as a medium of ex

    • Both. I would use it to transfer money to friends or family in other countries. There are also several countries where bitcoin has been a savior to the economy because their own currency is so unstable. But now that it has become an investment speculators are driving up the value which is destabilizing it as a currency. If it's not a stable currency then it's absolutely worthless and the analogy to tulips makes more sense.

  • Cryptocurencies may be the futute, but bitcoin is not.

    At worst, bitcoin is a pyramid scheme that consumes vast ammounts of energy, at best, it may take a role similar to the gold igntos in the vaults of the central banks of the world.

    Currently, (anonymity and "decentralized control not withstanding") bitcoin is useful for the narrow use case of a bank wire transfer. Around $20 per transaction, and a response time of 12 days (but wasting lost of energy per transaction). To pay for a Latte, or an amazon or st

  • Maybe the riches of Bitcoin can be used to fund Universal Basic Income

    • The riches of bitcoin are more likely to enslave you and your kids in their imaginary crypto future where the 4th reich is powered entirely by bitcoin. Just so you know.

  • The entire premise of Bitcoin is that it doesn't rely on a central authority/government to operate. But the price of that ability is incurred daily with high transaction costs, long transaction times, deflationary economics, and the resulting value volatility and susceptibility to speculation. I can't see why the general public in stable countries would accept those daily downsides to guard against a Black Swan of extreme government malfeasance.

    Bitcoin is essentially solving the problem of government/ba

  • The bitcoin market will drop, and like the Great Depression, many will jump from windows. Most of those will find it difficult to jump from the windows in their mother's basement.
    • Instead of jumping out of windows, the Bitcoin speculators will drown in their basements as their sump pumps, starved of electricity, fail.

  • The Bitcoin economy, to the extent that it exists, might be mirroring gold-standard economies of the past. During the Depression, the incentive to hoard hard currency in the form of gold was regarded as a major dynamic of the economic contraction. Why invest or spend when the value of currency rises, and the corresponding prices of goods in that currency decline?

    Economic managers during the Depression went off the gold standard, but WW2 intervened before we could really see if that would stimulate the glo

  • FZ [wikipedia.org] (almost) said it best:

    I might be movin' t' Mongolia soon
    Just to mine me up a crop of
    Crypto Coins

    Minin' it up
    Cashin' it down

Time to take stock. Go home with some office supplies.

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