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Critics may say that Bitcoin is too expensive as a medium of transfer. In truth, however, traditional bank transfers cost a whole lot more. Outbound wire transfers by banks are, in fact, 300 times more expensive than a similar transaction carried out over the Bitcoin network.
Banks pocket 83% of transaction fees
Data from Bank of America shows that outbound domestic wire transfers cost USD $30 and outbound international wire transfers cost $35. Fedwire, a funds settlement operation run by the United States Federal Reserve Bank, only charges banks $0.25 per transaction; which roughly translates to a profit of 83% on each transaction.
Using the Bitcoin network for money transfers is worthwhile
Conversely, Bitcoin’s transfer fee currently costs senders less than USD $1; considerably cheaper than a bank transfer. While the Bitcoin network experienced high transaction fees at its peak in November and December 2017 (fees ran at $55 per transaction), the present bear market has caused fees to significantly drop.
Reports confirm that regardless of the value being transferred, the sender pays a similar fee every time. With large bank transfers, senders must account for proportionately higher fees to ensure a transfer is completed.
This is a major reason why individuals in the real estate and art industries have opted to transact in Bitcoin. Fixed transaction fees offer predictability to both sides of a transaction and smoothen deal flow.
Bitcoin and its continued potential for business
Both speed and the instant ability to bridge geographic boundaries has appealed to businesses. They are gradually adopting Bitcoin as a mode of monetary value and transfer. As such, Bitcoin’s adoption rate is expected to grow. Banks would benefit from taking note of this unique and transformative opportunity that cryptocurrency has created.