Bitcoin Forum

Am I doing my math correctly?

If I deposit $7000 to Bitstamp to send $7000 worth of Bitcoin to someone .... it will cost me 1%, plus $40 international wire fee from my bank.
That totals:  $110

If I just send a wire to the person from my bank to theirs and keep it USD ... it will cost me $40 international wire fee from my bank.
That totals:  $40

So its nearly 3x as expensive to send Bitcoin to someone in another country if you use Bitstamp, than it is to just send USD?

-B-

Not to mention that if that guy converts the bitcoins to fiat, he'll have to pay a fee, too. In other words, fiat-Bitcoin-fiat is an expensive route!

Then again I suppose if you're converting fiat USD to fiat other currency, you pay 1 to 3% for that process too right?

Plus the wire fee.  So its the same, or less expensive with Bitcoin then no?

-B-

You are basically comparing this:

• One international USD wire transfer (bank fees)

With this:

• Two international USD wire transfers (2x bank fees)
• Two USD <=> BTC conversions at Bitstamp (exchange fees)
• One Bitcoin transaction (blockchain fees)

***

Now, compare this

• One international USD wire transfer (bank fees)

With this

• Two USD <=> BTC conversions face to face (peer-to-peer, no fees)
• One Bitcoin transaction (blockchain fees)

I'm pretty sure the latter is much cheaper than a wire transfer!

So it all depends on the route you choose.

Agreed, great post.  The general idea of BTC is not to be transferred back and forth between fiat, but rather to be a stand alone currency. 

That's like saying it's cheaper for me to pay you in dollars rather than converting it to euros, giving you euros, then having you convert it back to dollars :P

People do not have an unlimited amount of btc... So eventually they have to buy some and finding your local bitcoin freak and meeting in a coffee shop does not appeal to many. Lets face it... The average person getting into bitcoin takes a haircut. And the person who gets those btc more then likely will want fiat. That is why their will be a huge race by people to create exchanges over the next year. It is a stupid money making machine once setup.

TBPH, I believe Bitcoin payments will not replace fiat any time soon. But I also believe that many efforts are already ongoing and will continue to create upper layers on top of the Bitcoin blockchain.

Imagine the internet back in the 1980's (don't know how old you are... but supposing you know a bit of tech history). No one would have believed that the average person would start a Telnet session to their bank to pay their expenses. Yet, the underlying TCP/IP technology had started the revolution, and it was only a matter of time before application layers like HTTP and client software like NSCA Mosaic and then Netscape attracted the masses.

30 years later, it's commonplace to use e-banking solutions to pay the bills from laptop, mobile or tablet. Interestingly, the data is still carried over the same TCP/IP as far as the lower layers of the transmission are concerned. The revolution was already started back then, but no one, except the early adopters, was seeing it coming yet.

It depends when you ask that question.

Earlier in Bitcoin's history it was possible to deposit money into Dwolla from a US bank account for free, then have Dwolla USD show up on a Bitcoin exchange for $0.25. You could then convert the 7,000 USD to BTC for about .5% which is $35. Then send that for about $0.05 on the blockchain for a total cost of $35.30. So that comes out cheaper and you have a currency conversion in there.

This is no longer an option due to US regulatory pressures on Dwolla, but don't blame that on Bitcoin.

Some banks allow free wires with business banking. This is the only route that i know that is cheaper than bitcoin, because you cant beat free. It is definitely much slower though