The modern banking system introduced a new, more convenient and easier era. Funds can be send to anyone all over the world without transporting the banknotes and it can be done online in just a few minutes. It was a great improvement in payments but still has some drawbacks like transaction fees, time delays, bad exchange rates and the list just goes on.
“Well, these are just few things that are not highlighted in our “modern” banking system. Now, there is the question: who wants to pay for and bother with all of these when there is a more efficient way? Well, I do not...“
To start with, in our modern banking system maybe transactions became faster but for convenience you have to pay. If you would like to move your funds internationnaly, we can say it is pricey. You have to pay for the transaction cost and the exchange rates are not the best as you are not paying the mid-rate. The banks want to make some profit and you are the one paying it. This is the same with debit or credit cards if you are using them internationally or in other currency.
A fixed money transfer fee is charged by your bank when you transfer money outside of your country. The fee depends on the bank, the amount, the currency and it ranges between 0.5% and 3.9%. Moreover, you will have to pay the margin on the daily exchange rate which can reach 5%. In addition to these, maybe your recipient will be charged too with an exact amount, like $ 15-30 for receiving your money. Although it depends on a great deal of things and you can find cheaper methods of transferring money, if you add these up, it is way too expensive. On top of all this, maybe it is faster than transporting banknotes or sending checks but it can last for several business days for your transaction to arrive. However, the transfers can be there in hours between the same banks.
If you are using your card and make a purchase abroad or in other currency there is a foreign transaction fee (FX fee) which is usually approximately 3%. This is deducted from your account and the fee contains two parts. The first 1% is applied every time and charged by the card network company like Visa, MasterCard etc., and the other 2-3% by most of the card issuers. So to sum it up, you just want access to your funds but it does not come for free. If you have to pay e.g. $1,000, actually you are paying $1,030, which is a lot.
Meanwhile, the cryptocurrency networks are working efficiently, without meditators. You cut out the middle man so the transactions become cheaper, the transfers irreversible which improves the value of service. In addition, the blockchain established the smart contracts, the code became programmable which is one of the best improvement.
„A currency issued by the government does not have to be competitive to acquire user base. However, using Bitcoin is a conscious choice, not a result of coercion. People use Bitcoin because they believe in what it stands for or think it is more convenient than traditional currencies.”
With the use of cryptocurrencies everything can be solved. The personal costs seem to be just portions of the fees charged by the banking system and it is fast, really fast. From days or hours crypto can reduce the timeframe to minutes, or even to seconds.