Satoshi described bitcoin as «a peer-to-peer version of electronic cash» that allows you to send online payments «directly from one party to another without going through financial institution». «Internet trade was based almost exclusively on financial institutions serving as trusted third parties [who] handle electronic payments. Although the system works well enough for most transactions, however it suffers from weaknesses due to based on trust model. [In this model] is completely irreversible transactions are not possible since financial institutions cannot avoid disputes between brokers. The cost of mediation increases transaction costs limiting the minimum size of the transaction and making it impossible everyday small transactions…» — writes in Satoshi bitcoin white paper. And, as practice shows, in 10 years the banking system has not changed.
7 APR 2018 bus carrying the players of the canadian Junior hockey team collided with a truck. As a result, 16 people were killed and another 13 were injured. After a few days during the fundraising campaign on the website GoFundMe has managed to raise $15.1 million to help the victims and families of victims. In August, the court found that the payments will amount to $50,000 each of the 29 affected families.
Recently a Reddit user drew attention to the fact that of the $15.1 million of the funds raised $482,712 went to the Commission of operators who carried out the payment processing (2.9% of collected funds and to 30 cents on each donation). «That’s why we need the crypt» — writes user under the name HaterTotsYT. He points out that the organization GoFundMe refused any payments in their favor, «but the payment operators such as Visa and Paypal took 2.9% of all collected funds… almost $500,000 that could go to victims, not payment processors».
The fee that banks charge for incoming and outgoing transfers can be several tens of dollars, while the fee for international transfer is typically more than two times higher compared with domestic (within one country), and the fee for an outgoing transfer is higher than for incoming. On the example of Sberbank and several large American banks, the system of commissions is:
Without opening an account: 1.75% (minimum 50 roubles, maximum — 2000 rubles)
From account: 1.5% (minimum of 30 rubles, maximum — 1000)
Transfers within the same tariff zone (usually one town).
To the account of another Bank:
Without opening an account
Out of office: 2% (minimum 50 roubles, maximum — 2000 rubles)
Via ATM: 1.5% (minimum of 30 rubles, a maximum of 1,000 rubles)
From the account
Out of office: 2% (minimum 50 roubles, maximum — 1,500 rubles)
Online: 1% (maximum is 1000)
Inbox: 0 rubles
Outgoing (inside the «savings Bank»): 0.7% (maximum $100) for translation of a branch Bank; 0.5% (maximum $50) for online translation.
Outgoing (to another Bank):
1.5% (minimum $15, maximum $250) — without opening an account
1% (minimum $15, maximum $250) — to the account upon transfer from the Department
0.5% (maximum $150) — from the account in the translation online
Incoming: 1% (maximum Commission for transactions in rubles — 3,000 rubles, for transactions in foreign currency — $500).
Outbound: $35 — foreign currency, $45 — dollars
Outgoing: $25 for online transfers and $30 for transfers from a Bank branch
Outgoing: $40 for online transfers and $45 for wire transfers from Bank branch
Incoming: $0 or $15 (depending on type of account)
Outbound: $12.5−$25 (depending on the type of account; free — for clients of Citi Private Bank in the translation online)
Incoming: $0 or $15 (depending on type of account)
Outgoing: $20−$35 (depending on the type of account; free — for clients of Citi Private Bank in the translation online)
An alternative to the banks in the world of traditional Finance act payment operators. And, while some of them do provide benefits in remittances, while others act as another mediator, this time between you and the Bank.
For example, TransferWise allows for multi-currency transfers, charging a relatively small Commission 0.6% + $1 per transaction up to $135,000. A large operator of MoneyGram, declared in the winter of partnership with Ripple, is almost on a par with the banks: to send $6000 (the limit for online translation), you will need to pay a fee of $35 per transfer to a Bank account (and it will take up to 4 business days) and $195 for the transfer to Visa or Mastercard. To send the same amount on the same terms, for example, in the US, California, will cost slightly cheaper — $50 and $99.99, respectively.
In General, internal transfers (within the same country) are processed faster and require less of a fee, since they are in one payment system. Even so, the period of the execution of such a transfer may take several working days (for example, transfer from account to account via Sberbank may take up to two days if the transaction occurs between customers of the Bank, and longer — when transferring to another Bank). International transfers require even more time, because they involved a greater number of parties, including the Central Bank, a foreign Bank and payment systems of both countries. Thus, the timing of implementation of the international transfers through JPMorgan Chase are 3-5 days.
If to compare Bank fees with fees for cryptocurrency transactions, the latter will be lower in the hundreds, and sometimes hundreds of thousands of times.
So, now the average fee for a bitcoin transaction is $0.25, which is exactly 100 times less than $25 for the outgoing online transfer within the United States through JPMorgan Chase. The timing of transaction processing significantly less than when dealing with banks: from August to November, average transaction confirmation in the bitcoin network ranged from 8.8 to 14.3 minutes. And this despite the fact that bitcoin is not the most significant example, and it may not be is the perfect cryptocurrency for daily small transfers.
One of the most «impressive» — that is, the lowest — Commission looks for the translation in the Ripple network: today, it is on average $0.0004. And 3 December, a Twitter user noted a low Ripple for large Commission payments: «the Commission 0.005 XRP per transaction $175,334,767. This is the road to heaven.»
Speaking about the attitude of crypto-currencies and the banking system, not to mention Ripple, which mainly develops payment solutions for banks and other financial institutions. «Ripple keeps the token as a settlement asset that is compatible with its payment network. Its great value is that it allows you to make international payments using universal asset for a second,» said master Ripple cryptographer David Schwartz.
Statistics on actual time evidence of transactions in the blockchain Ripple unavailable, but in early December, 2017 — a much more excessive time in the crypto space, rather than now — time transaction processing with the Commission 0.000011 XRP−XRP 0.000019 (~$0.00000264−$0.00000456) was 4-5 seconds.
Average transaction fees for the other largest by market capitalization crypto-currencies:
Tether: $0 if the transfer between purses of the Tether; 0.4%, 1% or 3% when withdrawing to Fiat, depending on the amount (for transactions of $100,000); 0.1% for Fiat deposits (for operations from $100,000).
Bitcoin cash: $0.0045
EOS: $0 (but the device network costs for other resources — network traffic, processor time and RAM)
Given that this year the first bitcoin was 10 years old, too early to expect from the crypto-space stability or the complete absence of technical problems and limitations. And if the «financial» aspect that is the issue value of transactions, the crypt clearly wins banks, the issue of scale and scalability — not yet.
In particular, the size of the commissions in most of the block chain depends on network congestion. Thus, in the period of abnormal demand for bitcoin in December last year, the maximum Commission is $55, which exceeds even the appetites of banks.
In October 2017, in an interview with CNBC, one of the main haters of bitcoin, JPMorgan CEO Jamie Dimon noted that JPMorgan handles the transfer of $6 trillion per day, while the volume of daily trading bitcoin he estimated at «maybe a billion dollars a day» (in October the rate for bitcoins fluctuated between $1−$2 billion, but in the day of the interview reached $3.6 billion). Today daily trading volume of bitcoin is around $5 billion, which, of course, very far from that of the major banks. And, as shown by December 2017, when the volume of trading increased to $10−$20 billion, bitcoin is not winning from banks for commissions, and can not cope with the processing of transactions.
While the first cryptocurrency to develop their own solutions to these problems, the young cryptocurrency already represent a «new generation», trying not to inherit the deficiencies of their ancestors and to be more flexible, fast and cheap. So, the blockchain Minter to the Commission for the transfer or exchange of any size is a maximum of $0.01 for the throughput of thousands of transactions per second. In addition, Minter is possible to transfer from one cryptocurrency to another without the exchange directly within the network. Such developments allow us to hope that once blackany will overtake the banks in all respects, and will lead users to bezposredniego era, as intended by Satoshi.