$1 Million Through a Bank Costs $10,000+
On October 16, a Bitcoin user moved 29,999 BTC worth $194 million with a $0.1 fee, a transaction which with banks would cost tens of thousands of dollars.
An often pushed narrative against cryptocurrencies like Bitcoin and Ethereum is that it is expensive to clear transactions due to fees sent to miners. However, the $194 million payment on the Bitcoin blockchain demonstrates the potential of consensus currencies to optimize cross-border payments significantly. Transferwise is a UK-based multi-billion dollar firm that eliminates hidden fees in bank transfers. On the platform, users can send small to large payments through bank accounts with substantially lower fees.However, even on a platform like Transferwise, to send over $1 million, it costs over $7,500 in transaction fees. That means, through wire transfers and conventional banking methods, tens of thousands of dollars are required to clear a transaction that is larger than $1 million.Percentage-wise, $7,500 is less than 1 percent of $1 million, and in that sense, a $7,500 fee is cheap. But, on the Bitcoin network, which is supposedly highly inefficient in processing payments, it costs less than $0.1 to clear a $194 million transaction.