One of the biggest advantages Bitcoin has over the traditional financial networks is the low transaction-fee model. This has been amply demonstrated amidst the ongoing furor in the U.S. over the ‘Ukraine Whistleblower’ as fundraising effort on GoFundMe gets underway.
Less than a week since a complaint from an anonymous CIA agent alleged that President Donald Trump had sought foreign help in his 2020 re-election efforts, the GoFundMe page opened to assist in meeting the Whistleblower’s legal fees has raised over 80% of the targeted amount.
Nearly 4% in GoFundMe fees for Ukraine Whistleblower
If and when the target of $250,000 is reached, the whistleblower will receive less than 97% of the amount due to transaction costs and other fees charged by the fundraising platform. Fundraising in Bitcoin would, however, have saved more than half the fees.
Currently, GoFundMe charges a 2.9% transaction fee. It also charges a flat fee of 30 cents per donation. At the moment, the Whistleblower fundraising campaign has netted over $200,000.
Assuming the fundraising page will meet the target, the transaction fee would amount to $7,250 on $250,000. As for the total flat fee amount, reaching the target amount will require 6757 donors at the current average donation of $37 per donor.
So far 5,300 donors have raised $198,000. The flat fee would therefore roughly amount to $2,027 bringing the total cost of the donations to roughly $9,300. The fees would amount to about 3.72% of the total amount raised.
Bitcoin is cheaper, even for the small amounts it wasn’t designed for
If the fundraising were being held using Bitcoin, on the other hand, the costs would substantially fall. Currently, according to BitInfoCharts, the median transaction fee for Bitcoin transactions is 0.000068 BTC. This is about $0.569 for median transaction values of around $320.
Assuming the same number of donors were to use Bitcoin to make the donations to the Ukraine Whistleblower, this would amount to fees of around $3,840. Using Bitcoin to fundraise would thus have been 58.7% cheaper!
However, this would have been even cheaper if it were a single donation. In the past, millions of dollars have been moved while incurring very little in fees. Notable cases include a transfer of Bitcoin worth $194 million in October last year for a fee of ten cents. And earlier last month, a Bitcoin whale transferred BTC worth over $1 billion at a $700 fee.
Cryptocurrency still underexploited
In reality, however, Bitcoin is yet to go mainstream as a fundraising tool or even for payments. This is despite the huge savings in transaction costs that it offers. A study conducted by blockchain analysis firm Chainalysis, found that more than 90% of Bitcoin transactions center around exchanges meaning speculation or trading activity is still the biggest use case.
Still, its decentralized nature makes it the best option for whistleblowers and others who could potentially face the wrath of the government.