Bitcoin has often been criticized for being too high a price, but according to Bank of America data, the bank charges $ 30 for outgoing domestic transfers and $ 35 for outgoing international transfers sent in foreign currencies, which is 300 times more expensive than sending a transaction through the Bitcoin network.
US banks charge a lot of money for their transactions, especially since Fedwire, the official real-time gross settlement money transfer system operated by the US Federal Reserve, allow banks to transfer funds and only charges $ 0.25 per transaction. As a result, banks like Bank of America profit from $ 29.75 per transaction, which is a remarkable 83% profit margin per transaction.
Bitcoin, however, has reached its peak of transactions costs in November and December 2017, when the demand for cryptocurrencies showed the highest levels of demand in its lifetime. Bitcoin price almost reached $ 20,000, and the valuation of the crypto market was near 800 billion dollars.
During the peak, Bitcoin and other cryptocurrencies were struggling with scalability as blockchain systems were not ready for the number of transactions that took place. However, over the past several months throughout the bear market, developers have been working on scalability issues and upgrading Bitcoin along with several other cryptocurrencies such as Ethereum.
Bitcoin implemented SegWit and the Lightning network. These scalability solutions are expected to expand the transaction capacity of the blockchain network in the months and years to come. Since January, Bitcoin’s transaction fees have fallen to less than $ 1, and median fees hover around $ 0.1 per year, which is about 40% cheaper than Fedwire and 300 times cheaper than a wire transfer. banking of the big banks.
During the December peak, fees for Bitcoin reached $ 55 per transaction according to bitinfocharts.com. Today, the average transaction fee hovers around $ 0.491. Even though there has been a spike in fees for Bitcoin, it remains on average much cheaper than banks around the world. Even though cryptocurrencies and blockchain are at an early stage of development, they are already significantly cheaper than banks. As new scalability features are applied to networks and improvements are made on a regular basis, the costs could decrease even further in the future.
Bitcoin has suffered a huge price drop in recent months and has fallen 70% of its peak. Many say this is just the start of new technology and some are even more optimistic than others. Billionaire investor Tim Draper has noted that the cryptocurrency market could reach $ 80 trillion over the next 15 years due to its enormous potential to disrupt industries around the world.
Image source: “Flickr”
Dennis SahlstrÃ¶m has been trading and investing since 2012 and has been consistently profitable over the past two years. It has been in the crypto and blockchain space since mid-2017 and has realized its potential for our world, including how it is transforming the society we live in. He has now created an education platform, with wealth coach Marcus the Marie. They teach ordinary people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like it’s time to step into this new asset class, download our free book and register for the next live training to start your future in cryptocurrencies.