According to sources, on October 16th, a Bitcoin user managed to transfer 29,999 BTC with a transaction fee of only $0.10. This amount of Bitcoin equates to $194 million, and a transaction of this magnitude would usually incur bank fees in the tens of thousands of dollars. With such a small Bitcoin fee for such a large transaction, will we see widespread adoption for big over-sea payments?
Small Bitcoin Fee
Bitcoin transactions are a funny one. Often, complaints roll in by the dozen about the cost of transaction fees because to clear a transaction on such a high-volume network means paying for expensive miners.
But this transaction shows the potential of the Bitcoin blockchain to perform cross-border payments cost-efficiently and effectively.
Claims have risen before about transactions on the Bitcoin network costing $60. As recently as October 14th, cryptocurrency critic Nouriel Roubini, economist and professor at Stern School, made such a statement.
However, his claim was met with fire:
“BTC fees are less than $0.10, easily verifiable. If you value truth, you’d provide a public correction.”
So if this transaction did indeed only cost the sender a small Bitcoin fee of $0.10, then it throws regular banks into chaos.
Regular Banking Fees
To put it in perspective, the cheapest platforms available to transfer fiat currency abroad still ask for a percentage of the cost, and that percentage is far greater than $0.10.
For example, on a platform like Transferwise, to send over $1 million, it costs over $7,500 in transaction fees.
Percentage-wise, this figure is less than 1% of $1 million, so $7,500 is considered cheap for a transfer that large. However, using the Bitcoin network at $0.10 for the same transaction is astronomically (and literally) cheaper than $7,500!
The biggest issue with the Bitcoin network and transactions has been scalability. But this is an issue that is being resolved. Bitcoin’s Lightning network is offering the ability of on-chain and second-layer solutions. This means the network, in effect, can process small payments faster.
But at the scale of $194 million, massive firms and investors will no doubt prefer the Bitcoin network for over-seas trading, would they not? Why would you want to pay hundreds of thousands of dollars in bank fees when you can pay a small Bitcoin fee of 10 cents only?
I know what I’d choose. What about you?
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