BitPesa uses Bitcoin for remittance in Africa. Is $0.57 fee expensive?

[uchalkql]

Hi,

I was watching a video about Stellar, but in the first part a girl from BitPesa talks.
It's really cool to know that Bitcoin is helping sending money to/from Africa!

But then I was worried if the fee is too high for them.
I then searched the current fee to have your transaction accepted fast, and it seems to be 45,200 satoshis
https://bitcoinfees.21.co/

which corresponds to USD $0.5770955200
https://99bitcoins.com/satoshi-usd-converter/

Well, it seems that it is not a big problem, but it concerns me a little when I know that most people in Africa receives less than $ 2 / day.
http://www.infoplease.com/ipa/A0908763.html

Is it such a big problem to increase the block size to 2MB, so the fee could be reduced?

[1715143580]

1715143580

[numismatist]

It's really cool to know that Bitcoin is helping sending money to/from Africa!

Senders transfering to Africa can afford .57 in all cases, sending from should not be required when people cannot afford that much. Whoever earns two dollars a day might not want to transfer those two dollars to america.

Second, you recognized "to have your transaction accepted fast" a lower fee can transfer in a half day which still beats other payment channels.

So there isn't any accute problems, but I do admit that from an advertisement perspective high fees are not sexy, nothing you could use as an unique selling point. The cheaper, the better. From the internet even people demand everything to be completely for free.

[uchalkql]

Good points numismatist.
Most of them will just receive money ...

[franky1]

Hi,

I was watching a video about Stellar, but in the first part a girl from BitPesa talks.
It's really cool to know that Bitcoin is helping sending money to/from Africa!

But then I was worried if the fee is too high for them.
I then searched the current fee to have your transaction accepted fast, and it seems to be 45,200 satoshis
https://bitcoinfees.21.co/

which corresponds to USD $0.5770955200
https://99bitcoins.com/satoshi-usd-converter/

1. Well, it seems that it is not a big problem, but it concerns me a little when I know that most people in Africa receives less than $ 2 / day.
http://www.infoplease.com/ipa/A0908763.html

2. Is it such a big problem to increase the block size to 2MB, so the fee could be reduced?

1. it is a problem its basically making bitcoin out priced to be accessable and usable for third world countries.
but the american devs cannot see passed their noses and think that the fee's are acceptable because.. dare i say it, they have a nice share of a $70m-$95m investment paying their salaries. so they have lost grasp of the real world.

2. the 2mb was the compromise of late 2015 roundtable consensus agreement.. these days with the mempool at a constant 2-4mb (prior to october 2016 and higher after that) even 2mb is starting to not be enough.

i agree that the fee's are stupidly high but core have actually added a few fee war creating things that are pushing the fee's up not down.(average fee replaced reactive fee(no longer instantly drops at low demand), removal of priority, addition of fee filters, etc)


their solution.. LN offering OFFCHAIN payment which are only economically viable for people spending often and thus saving via spending many times inside an LN for micropennies fee, to counter the ONCHAIN fee of depositing(open channel) and withdrawing(close channel).
(your example $0.5770955200... means to use use LN costs ~$1.16(2x0.58)) but then if they make 10 transactions in LN for a penny each
total =$1.26 for 10 payments = equivalent/average of under 13cent a payment (in the dumb american economic mindset)

but here is the secret why they also dont care about the onchain fee. they need LN to work and be the thing that everyone is forced into. because they need to grab al those (non miner) ln micropenny fee's to start repaying their VC's for the $70m-$95m investment(debt).

hense why they have done these silly social poking the bear games and offering half ased empty gesture feature updates to keep people waiting.. wihle pushing fee's up to make LN seem more attractive..

[n0ne]

Bitcoin adoption is found high on African Country these days. Importantly Nigeria is taking lead as a major one to be into bitcoin usage even after warning made by the Central Bank of Nigeria that no digital transactions involving bitcoin or other digital currencies could be done within the country. But people have shown more interest towards it. As a part bitpesa could have made strategies to make the best profit out of it before government make regulations.

[bamboylee]

You are right OP, that is quite high transaction fee but as person coming from a third world country, that is still low fee compared to other modes we use here. And of course, you will not send just 2$  in a single transaction, that is a waste of fees.

[maku]

I sent 0.25 BTC yesterday, the money I collected from participating in signature campaign before.
My wallet automatically chose the best fee. Can you guess how high it was? Freaking 0.001692 BTC fee! More than 2 dollars.
So no, Bitcoin is unfitted to help Africa or the poorest, unbanked population, it is becoming a rich people's playground instead.

[franky1]

You are right OP, that is quite high transaction fee but as person coming from a third world country, that is still low fee compared to other modes we use here. And of course, you will not send just 2$  in a single transaction, that is a waste of fees.

this is where remittance ONCHAIN will only work if people start only sending funds 'home' once every few months instead of once a week because bitcoin is becoming less attractive to developing countries.

yea many say bitcoin popularity in third world countries is on the increase. but thats just a few 'promoters' trying to introduce people to bitcoin. after the citizens start actually using it alot of third world countries start seeing the flaws and issues.. alot more than what first world countries see

 but the american devs just dont care about anything beyond their own nose

P.S im from a first world country but have travelled and promoted bitcoin and seen all the pros and cons, seen where it works and doesnt work. and end up shaking my head in despair that bitcoin devs are dismissing and ignoring the 'unbanked' due to ignorance and snobbery

[uchalkql]

thanks a lot franky1, n0ne, bamboylee, maku. 

maku,
is there not an option for you to choose the fee?

franky1,
let's hope there is not a conflict of interests. it would be terrible for Bitcoin.

Bitcoin has such a huge potential.
After learning about BitPesa, I was thinking if even banks could use Bitcoin for international transfers. Wouldn't it be funny?! =)

They would create a Bitcoin address for each of their clients! lol

If Bitcoin transactions had an space for exchange information, it would be even more powerful!

[franky1]

I was thinking if even banks could use Bitcoin for international transfers. Wouldn't it be funny?! =)

They would create a Bitcoin address for each of their clients! lol

If Bitcoin transactions had an space for exchange information, it would be even more powerful!

banks are developing their own altcoin.
its called hyperledger lots of international banks are involved and loads of private finance firms are too.

dont expect banks to get involved in bitcoin. because banks want a currency they can 100% control.
hense they are building hyperledger

[Kakmakr]

It is still cheaper than M-Pesa that are used more frequently down there and also cheaper and more accessible than banks. The problem comes in when you make small purchases on a regular basis and these micro payments will quickly turn into a fee nightmare for them.

Most of their purchases is micro payments, so this is already not viable for them to use Bitcoin at $0.50 cents a pop for single micro transactions.

The remittance market on the other hand, is definitely a better option for them, because Bitcoin is much cheaper for that. 

[Xester]

It is still cheaper than M-Pesa that are used more frequently down there and also cheaper and more accessible than banks. The problem comes in when you make small purchases on a regular basis and these micro payments will quickly turn into a fee nightmare for them.

Most of their purchases is micro payments, so this is already not viable for them to use Bitcoin at $0.50 cents a pop for single micro transactions.

The remittance market on the other hand, is definitely a better option for them, because Bitcoin is much cheaper for that. 

If the fee would cost that much then they should not make small transactions daily but rather make a one time large transactions. In that way they could save and will not suffer huge loss on paying the huge fees. Those fees are not a hindrance in bitcoin all we need are strategies and ways how to overcome those higher fees that are being set by the exchanges and miners.

[uchalkql]

Thank you Xester and Kakmakr. Thanks again franky1. 

[Carlton Banks]

But then I was worried if the fee is too high for them.
I then searched the current fee to have your transaction accepted fast, and it seems to be 45,200 satoshis
https://bitcoinfees.21.co/

If the purpose is remittance, why would someone choose a fee so high that it gets accepted in less than 1 hour? Equivalent remittance services don't process transactions that fast.

You're not comparing like with like.

[squatz1]

When comparing these fees to the ones that Western Union force people into paying really doesn't even compare as WU and all those other services which are present in developing nations are 10x more and still tackle on other fees along the way. Unless these people are transferring super low, and I mean gruesomely low paychecks to people in Africa then they should be fine.

Feel bad for the new people who want to use bitcoin for everything online and end up noticing that went they bought this cheap item it now costs another .57 cents due to the fact that no one can decide on a scaling solution, it's fucked up.

[mobnepal]

$0.57 in fee is not that high if you are sending few hundreds dollar worth of bitcoin compared to other payment processors. With normal remittance service you will end up paying 5%-10% in fees, and talking about remittance i am quite sure nobody will send very small amount through bitcoin. So current fee of around 50 cents is not a big deal.

[Kprawn]

The $0.57 is a bit optimistic when these spam attacks are done, it can be much higher than that. I would rather signup for a service with free

off-chain options, like Xapo to use Bitcoin for these small transactions daily. This might not be the ideal solution, but it is better than paying

through your ass, by doing these transactions on-chain.  .... We will just have to wait, to see if Bitcoin can scale to make BitPesa successful.

[GooCust04]

The $0.57 is a bit optimistic when these spam attacks are done, it can be much higher than that. I would rather signup for a service with free

off-chain options, like Xapo to use Bitcoin for these small transactions daily. This might not be the ideal solution, but it is better than paying

through your ass, by doing these transactions on-chain.  .... We will just have to wait, to see if Bitcoin can scale to make BitPesa successful.

This seems to be the case with Filipina. If these experiments are successful, then follow their example will take a minimum of time.