A lot has been spoken, in theory, about the money transferring capabilities of cryptocurrencies and how cheap it is to use them instead of traditional banking systems. All those theories seem to be coming to reality after XRP, Ethereum and Bitcoin both seem to have demonstrated transferring huge sums of money at negligible fees.
Ethereum and Bitcoin prove their potential as cheaper and quicker payment options
This week, A multi-million dollar worth of transaction that could have cost senders over $5 million in commissions on legacy systems was made with $0.06 on Ethereum. The Ethereum block 6556384 went through 5080 confirmations and took over 19 hours to transfer more than $183,000,000 without having to go through expensive intermediaries. The scene is pretty typical to those who transfer value on the blockchain on a regular basis. But, simultaneously, it is a clear attestation for one of the blockchain’s most killer applications: remittance.
— Altcoin Thoreau (@cvrbonbased) October 21, 2018
Last week, On October 16, a Bitcoin user moved 29,999 BTC worth $194 million with a $0.1 fee, a transaction which with banks would cost tens of thousands of dollars.
According to research across media, a legacy payment system like PayPal – after removing the remittance limit – should have transferred $183 million by charging a $5.3 million transaction fees in an average East-to-West payment corridor. Western Union, another global remittance service, should have sent the same amount by taking out $120 off each $3,000 transferred. The Ethereum blockchain transaction fee was lower than what Western Union charges for sending $50.
Same is with Transferwise is a UK-based multi-billion-dollar firm that eliminates hidden fees in bank transfers. On the platform, users can send small to large payments through bank accounts with substantially lower fees. However, even on a platform like Transferwise, to send over $1 million, it costs over $7,500 in transaction fees. That means, through wire transfers and conventional banking methods, tens of thousands of dollars are required to clear a transaction that is larger than $1 million.
The same was noted by Joseph Young today when he tweeted
This week, $183 Million in Ethereum was moved With $0.06 fee instantaneously.
Last week, $194 million in Bitcoin was moved with a $0.1 fee.
To move $1 million costs $10k using banks. This is one killer application of crypto that currently works.
— Joseph Young (@iamjosephyoung) October 22, 2018
This comes to a strong reply to cryptocurrency critic Nouriel Roubini, who recently in his testimony had claimed that it costs $60 to process a Bitcoin transaction and as such, it costs $63 to purchase a Starbucks latte that costs $3, using Bitcoin.
With these capabilities, we may soon see traditional banks accepting cryptocurrencies to speed up their transaction strength. That’s what has been happening with Ripple Net and XRP and soon it seems Ethereum and bitcoin too will be in the queue.
Will Bitcoin and Ethereum soon find a wider option? Do let us know your views on the same.