A report published by Ethereum World News suggests traditional banking can be up to and in excess of 120x more expensive than cryptocurrency alternatives according to data received from the Bank of America. Decentralised cryptocurrencies have distinct advantages over centralised financial systems.
To send a wire transfer from within the US a customer is looking at a $30 charge increasing to $35 if it’s international. The report explains that for a wire transfer it costs Fedwire $0.25 for interbank transactions between United States Federal Reserve Banks. This results in a difference of $29.75 between the charge and cost that is kept by the bank.
Bitcoin was introduced to alleviate some for the restraints traditional banking brought such as the cost and speed of transactions. The Bitcoin network allows you to set a fee for your transaction to help determine the speed at which it is accepted into a block.
According to data through bitcoinfees.info on average a fee of $0.09 will have a transaction mined within the next block which occurs every 10 minutes. An order to buy Bitcoin with a fee of $0.03 on average will be mined within the next 6 blocks. Comparable to traditional banking costs these are very low.
Exchanges tend to set the lowest fee for transactions which can cause delays when using to buy and sell cryptocurrency. By setting this fee at the lowest a request to buy Bitcoin through an exchange is likely to take longer than a normal transaction.
Though the Bitcoin network was designed as an improvement on traditional banking, it still has flaws. Scalability is an issue in which during periods of high traffic, the network can experience congestion. At the end of December 2017, the network experienced its longest delays due to the volume of transactions. To have a transaction accepted into the next block required $35 and this rivals that of traditional banking for international payment. A request to buy Bitcoin at this time would have experienced huge delays in receiving confirmation.
Though there are distinct financial advantages of buying Bitcoin for transactions it is not fully reliable and able to handle the volume needed for mainstream adoption
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