Bitcoin Forum

Last April 1, 2014 I decided to compare cash to bitcoin. I did not post that day, because people might think it's a joke, but this is serious.

Fiat / Cash:

1. I went to a bank.
2. The drive was about 20 minutes going there.
3. Paid toll and gas too.
4. Had to write a check to myself to withdraw the cash.
5. Bank had to count the money.

Proof of the money in pictures:

https://i.imgur.com/EAjbQz4.jpg

That's 10 stacks of one thousand Philippine Peso bills.

https://i.imgur.com/gRqEyYV.jpg

That's the buying rate of that particular bank at that day for the USD, so if you want to know the dollar value of the cash I had it was 21,555.55 USD.

6. Stuffed it all in an envelope.
7. Went to the car.
8. Drove to another bank, that took about 15 minutes.
9. Lined up and waited for an available teller. Waited about 30 minutes. Standing. In line.
10. Filled up a cash deposit slip.
11. Waited for the teller to validate the transaction. This means she had to unpack the envelope and look at each individual bill to make sure the money is not counterfeit. This took another 20 minutes.
12. Got the validated deposit slip, transaction is confirmed.

Total time: About 2 hours.
Transaction fee: Gas, Toll, and my rate for 2 hours. Bank also requires a minimum maintaining balance, but let's not count that.


Okay, now, to send my friend in another country 21,555.55 USD worth of bitcoins:

1. Turn on computer. Wait 1 minute.
2. Launch bitcoin-qt. Wait 1 minute.
3. Click "Send". Type details. 1 minute.
4. Enter 64 character alpha numeric special character password to authorize transaction. From memory. 30 seconds.
5. Broadcast. 2 seconds later, 50% of the network knows about it. 10 seconds later, everyone knows about it.
6. Wait for some miner to pick it up and stuff it in his next block. 10 minutes.



Okay, now, my friend, please send back my money. Thanks! :)

*transaction details have been altered to protect my friend's identity.

You sent a friend 21 thousand dollars? And want friend to send it right back?

Bitcoin = trust indeed!  ;D

Cool experiment! :)

You can wire transfer people money much easier then that.

You can even do it for free if you have certain business bank accounts (100K+ min balance ofc)

Now make a youtube video on it  ;D

very nicely said :)

Wires here have both a cost and waiting time. Check payments require 3 days clearing. Cash withdrawals and cash deposits are the fastest method right now, but require physical presence.

But I was bored, so ... (btw it's not my money, I'm just the escrow.)

Did a wire transfer from one bank to another bank a few months back, the charge was like $80 or something and took 3-5 days.

Nope, don't share your sentiment. 

I did a wire transfer once. Wired like 25K, the charge was $25 and took < 1 hour.

Bitcoin isn't fee free.

You have to convert $$ into bitcoin, send bitcoin, then the receiver has to convert bitcoin into $$.

That process can take weeks.

Coinbase has instant buys.  As soon as I click buy, I get Bitcoin.

Transferring to another wallet address takes a few minutes, maybe an hour or so.

Depending on how the other person wants to convert BTC to fiat and their institution, it could take minutes, hours, or days tops.

It doesn't take weeks, not sure if you've ever done a Bitcoin transaction before.

I don't understand this. The current exchange rate for RUR vs USD is 1 USD = 35.67 RUR.

Then why the selling rate is given as 1 USD = 45 RUR? That's daylight robbery!

note: lining up in the Philippines is a normal they double / triple check BEFORE they let you withdraw money, on top of that the teller have to ask the manager to sign the withdrawal slip... ONLY in the Philippines such a SLOW system.

+ the FEAR of getting rob as you go OUT of the bank as there's WAY TOO many eyes watching...

:) Only in the Philippines :)

Ok, coinbase charges a huge 1% fee (that's big in the currency transaction world. Trading between USD/EUR for instance, costs you a few pips at most). That's on top of the bid-ask spread . So if you're sending 10K, that's $100 for their fee alone. And I don't think you can instant buy that much.

wow, op, you suck at money

$1 for $100 is huge now?  That's nothing compared to a Wire Transfer fee.  I paid $80 just to wire $800.  By my math that's 10%.

Not a Mickey mouse bank either, Wells Fargo, the biggest bank in the US.

By the way my daily buy limit on Coinbase is $50,000.

Yeah, well, I would only wire transfer money if it's a large amount. Like > 10K.

And you got scammed if you paid $80 to wire transfer money. Typical outgoing wire tx fee in the US is around $25 for domestic, $40 for international. $25 out of 10K is .25%.

There's other ways to move money around that has less fees. Like you could use chase quickpay, which is free. People use wire transfers because they are very hard to reverse. If the recipient trusts the sender there's plenty of low cost ways to move money around.

The OP was talking about moving around a fairly large amount of money.

youve just got to withdraw the bitcoin into fiat and transfer to your bank account. still takes days!!

if you have 10-20 years of economy ... not a big deal.
http://media3.giphy.com/media/Nx2Lx1RmLadtC/giphy.gif

Sir, that's Philippine Peso. Not RUR.


Yes. Scary. I have another post here on this forum about 3 million pesos (60k USD). In those cases, I take a non-standard route that goes through armed security, as well as keep my 1911 (Armscor GI model) fully loaded.


And, how do I suck for money? That's the deal, it had to be done.

On other days, the money transfer is from one bank to another and the other bank is literally next door. Between the two doors, there are 6 armed security guards. The counting and lining up still takes time. I have someone line up for me in the second bank while I'm in the first bank waiting.

BTC has extremely low fees (for any large transaction) and is pretty fast.
For smaller amounts, you can get virtually no fees and super-fast times, with alt coins.

BTC > Wiring money.

Yeah and you dont have to waste time and gas to get to the bank and spend more on gas just to do so,  Banks are a joke when it comes to exchaning peper currency

Oops... made a mistake. The symbols are so similar.  ;D

http://2.bp.blogspot.com/_nED8cszYok4/R5C0SA0zq5I/AAAAAAAADD4/cxfE8KYce6o/s400/peso.GIFhttp://www.flaticon.com/png/256/38559.png

Well whole point of bitcoin is that transactions and daily payments are much easier.

great experiment Dabs.  This is the thing with bitcoins that I love so much...
I can send coins all over the world and in a few minutes it's been verified and both parties can see this in real time.  I don't have to worry about a money order being stolen or crazy fees and wait times...

As much as I don't love banking, I don't think Wells Fargo is a scam bank.  $80 is standard there.

I don't think you know what you're talking about.

$80 sounds high unless maybe you were wiring a small amount in a foreign currency. The normal fee for domestic wires at wells is $30*. $25-$35 is pretty common for domestic and maybe $35-$50 for international. International wires in a foreign currency may be more expensive depending on the exchange fees being charged.


*See https://www08.wellsfargomedia.com/downloads/pdf/online_disclosures/FEE/EN/FII.pdf (https://www08.wellsfargomedia.com/downloads/pdf/online_disclosures/FEE/EN/FII.pdf) page 49.

Sorry $76 wire charged from Wells Fargo to Bank of America in St Louis.  Just checked my checking acct:


The wire was for 2 Black Arrow X-1 miners at $704, so the rest is the wire charge.

To be honest, $76 for a domestic wire is a total rip off. I can't imagine it being 2.5x higher then what the brochure I linked states. If the $45 or so is important to you, I would inquire as to why the fee was so high.

Not sure, they said it was standard fees for bank to bank(non Wells Fargo).

It is what it is, maybe they don't play nice with Bank of America.

What about a limited money supply,
Not controlled by the Feds?

I don't think the point of the demonstration was understood.

If we have a Bitcoin (or cryptocurrency) based world economy we don't need to deal with all these expensive and time consuming transfer issues, we can spend that time and money making more money, or having sex.

And again, you're ignoring the costs and time to transfer money into BTC, and transfer BTC back into money.

As much as i admire the effort of the OP research, and for his case it is no doubt correct, it misses a crucial point:  not all banks work like that.

If i want to transfer fund in the UK from my bank to another UK account, there's no fee and its near instant (never actually time tested, but when i've transferred funds recipient has report it there at their next login).  If i want to transfer anywhere in EU its near instant and theres a flat fee £15 though some banks vary.  That's 0.075% fee on £20k.   Its the same or similar across Europe.

The only limitation is the bank's infrastructure or business model that relies on fees.  A multi-lateral agreement to ditch fees between banks (as has occurred within the UK) and we'd have completely free intercontinental transfers.  

The point is, if you are expecting Bitcoin to become common usage to solve the matter of money transfers, i'm afraid there is limited scope.  One tweak to existing business model and agreements and the advantage disappears for Bitcoin.

If bitcoin forces banks to become "better", that's a good thing isn't it? It's essentially competition.

However, banks are still centralized and controlled by governments. That's not likely to change.

The time required for confirming a transaction is worrying me.

Blockchain can detect double-spends almost instantaneously.

Wait 2 seconds = 50% of network has the transaction.
Wait 10 seconds = 99% of the network has the transaction.

Check transaction if it has a fee, and it will likely be included in a block soon.
Check if a double-spend is detected, if none, it will likely be included in a block, but maybe later if no fee or low fee.

No need to wait for a confirmation.

Only worry if any of the following conditions are met:
1. double-spend detected.
2. no fee or low fee, and blockchain says it might take awhile to confirm.

Personally, I've had a transaction take a day to confirm, but I was not worried because there were no double spends. It took that long because the blocks ran out of space for free transactions.

Now I include a minimum fee in all my spends even if it is not required.

For most use cases where you have the option to pay by bank wire or check, that means the merchant or other party can wait 10 minutes. It may not work as well for instant purchases or very small transactions without some sort of third-party processor that "guarantees" the transaction. Or some dice site that accepts the risk of zero confirmations.

I just pretend that I paid using a check that clears in an hour.

As a merchant, I would accept as payment any bitcoin transaction that:
1. Does not seem to have any problems after 30 seconds.
2. Includes at least 0.0001 as a transaction fee.

http://bitcoinstats.com/network/propagation/


http://bitcoinstats.com/network/propagation/2014/04/03


So, basically, wait 1 second to 5 seconds, after you've seen the transaction. In a little bit more than half a minute, all nodes would have seen your transaction. No funny stuff? Treat as good, it probably is.

Notice that BitPay processes almost instantly without waiting for a block.

You'll find out in the next few blocks.

Excahnge rates = death of fiat

I remember Checks was king, before Cash was king.  Then 90s was having the platinum American express CC was king also.

For people living in the US, it is not a problem. But consider my example.

I work at Freelancer.com and is paid £100 for my work. They deduct a fee of £10 and I am left with £90.

Now I deposit this to my Paypal account and they immediately deduct £3 as fee and £3 in exchange rates (My PP account is in USD, as most of the payments which I receive is in that currency).

I need to convert the money in to local currency, so that I can deposit it my bank. Biased exchange rate means that I lose another £3. So... out of £100, now I am left with £81.

Here is the comparison:

Paypal: £ 100 ==> £ 81
Bitcoin £ 100 ==> £ 88-89

and for bitcoin you already got charged with 2 exchange fees. (govt. money -> bitcoin -> govt. money)

If bitcoin has enough liquidity to be used directly for everything (including paying you), you'll end up owning ~ 99.5 pounds after transfer

Definitely not. I will be paid in BTC. And I'll use those BTCs for my day-to-day expenses. There is no need for any currency exchange.

One of the things everyone here is missing is that what he did (sending money internationally) is basically getting to be impossible if you try to do it from the US.

US banks (See Chase) are shutting down international wire transfers for individuals and small businesses.


So, you can't even compare really...

1. Send bitcoin in minutes to anyone, anywhere, any time without filling out paperwork or having your transfer delayed, reversed, or denied. 

2. Use a banking system that will charge you up to 10%, make you fill out invasive paperwork, take several days, and probably get declined due to the amount, or where it is going as they nanny you and tell you it is "too much of a risk".

 

 I like what your saying just giving answers to what I do compared to your situation.


4. Had to write a check to myself to withdraw the cash. 

 I use  a debit card.

9. Lined up and waited for an available teller. Waited about 30 minutes. Standing. In line

 I've never waited that long in my life again debit go to ATM to withdraw or deposit.


 I understand things are different everywhere when it comes to banking but in the US it's kinds convenient.

Finnaly good insight and comparsion, gotta agree with you bitcoin transaction is safer, simplier and cheaper.

These thing are too different to compare!

I'd use the debit card, if it did not limit me to 25,000 PHP per transaction. The account where I was getting the money from did not have a debit card though.

The ATM machines in my country have limits, unfortunately.

You have nice handwriting, Dabs.

May I ask what currency that is? Never seen before.

(Can't find the symbol to google it either)

http://en.wikipedia.org/wiki/Philippine_peso

This is truly dumb and pathetic

You can write transfer money to your friend online via bank or third party online remittance service it only takes few hours

Also you conviently removed the part where u had to convert your fiat to bitcoin which can take days if your using exchange and u lose alot on exchange fees and your friend loses when Bitcoin prices goes down by the time he received it

It is PESO so take for such a long time.

I think Bank is more safe, like mtgox, where will be my Bitcoin

just read this post. this is the main reason why crypto currency will be accepted worldwide in the future.

- no need to wait on a long queue
- less transaction feed specially for fund transfers
- no need to go to a bank physically.

just need to develop more secure way or even if it was developed people will always find ways to do something evil. Just be mindful of the transactions and all is good.

welcome to the future...