Steam bans NFTs: But why?

Every few years, a new, disruptive technology comes along that promises to change everything. In this era of digital-first technologies and the diminishing physical presence of just about everything that can be placed on the internet, these technologies seem to come and go quite quickly. Sometimes, they stick around. We saw it with blockchain and bitcoin – but what about NFTs?

An Odd Proposition

It wouldn’t be unfair to the concept to say that NFTs are a bit of an odd proposition. At its simplest, the customer exchanges cash for a digital receipt of a piece of work, whether that’s a picture of a dog, a song, an album cover, a GIF, or something else that can be put to code. It’s then stored on the blockchain, where it becomes an inviolable thing, safe from theft, destruction, forging, and other nasties.

Source: Pexels

Compared to cryptocurrency, though, NFTs feel like a novelty. Bitcoin, while it still hasn’t gained the mainstream acceptance we’ve been promised for a decade, is still considered an asset to shoppers.

Microsoft, PayPal, Etsy, and several other retailers continue to accept bitcoin, as do a number of casino websites. The comparison site SuperLenny lists bitcoin acceptance as a particular perk of the gaming operator Rizk. In the latter case, this is quite an odd trait, as the use of bitcoin at retailers and casino operators continues to trend downwards, at least in terms of how many companies are willing to accept the cryptocurrency.

Both Amazon and PC storefront Steam have abandoned bitcoin after a short period of acceptance but Gabe Newell’s gaming company seems to be taking its distaste for the blockchain one step further.

Self-Created Items

Steam recently banned games that contain cryptocurrency and NFTs. This means that products that sell digital items such as ‘property’ on a map or unique, procedural creations can no longer do so through the storefront. The rationale behind this move isn’t easy to find, as Steam isn’t fond of explaining its decisions. However, it goes against the fact that digital items are sold on the platform all the time.

Source: Pexels

Valve’s dislike for NFTs may have something to do with the fact that games featuring the technology are rarely true entertainment products and operate more as an NFT marketplace for their own self-created items. A lack of regulation in the space also means that Steam could end up on the hook for any particular issues that arise from NFT trading on the platform.

See, NFTs seem to have already failed at their sole premise, namely, providing a bulletproof guarantee that an item is genuine. Magazine site The Verge cites the example of artist Derek Laufman, who had his work sold as NFTs without his knowledge or permission. This kind of black market for digital receipts was perhaps inevitable but it’s alarming how quickly the NFT technology has been turned to more ominous ends.

Overall, NFTs provide a novel approach to setting ownership in stone but there’s still plenty of details to iron out before it can reach mainstream popularity.