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Are they just the usual achievement-ish stuff or do they serve some deeper purpose?

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Stuff like the "Years of Service" Badge is basically a badge that expresses how fast you have been adapting Steam, so it is a personal hipster-meter. Other badges show how social and committed to a better world you are, by buying more trading cards from all the other broke people that sell them for cash to buy more Steam Games. – user53721 Sep 13 '13 at 19:55
@leetfan Committed or addicted? :P – Zommuter Sep 14 '13 at 10:04
up vote 4 down vote accepted

Steam Badges only serve two purposes:

A) Add experience points to your profile

B) Add bragging rights

Experience points are required to:

A) Level up (duh)

B) Gain more slots on Friend List

C) Gain Profile Showcases

D) Have a chance of getting Steam Coupons for games

Without Steam badges, you won't be able to have additional room in your friends' list, showcase anything notable on your profile, or get Coupons towards Steam games.

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According to this article and my own experience, they currently serve no purpose apart from bragging rights.

This doesn't mean that they couldn't use them later to reward people using steam a lot. (Like giving early beta access or other rewards.)

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Maybe they'll give you Steam hats if you get a lot of badges. – kotekzot Jul 14 '12 at 10:56
Now you're getting XP for them, and it's related to the trading cards – Zommuter Jun 15 '13 at 7:39

You get a few hats in TF2 for completing some of them. Otherwise, they're just swag points on your profile.

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Which hats? I'm confused, I don't believe any badge yields getting a hat – Retrosaur Sep 14 '13 at 22:08

You also get a coupon every time you complete a badge (most in my experience are 50-75% off) however it's for a random game so it may be useless to you. They have an expiry date but can be traded (but not sold.)

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