The most recent release of the Bitcoin Core wallet allows the user to define the transaction fee they are willing to pay. The amount that a user is willing to pay does, in the end, affect the speed of their transactions. However, users who pay…
The most recent release of the Bitcoin Core wallet allows the user to define the transaction fee they are willing to pay. The amount that a user is willing to pay does, in the end, affect the speed of their transactions. However, users who pay no fee at all are not necessarily going to be prevented from having their transactions confirmed. Liken it to a standby flight, but for currency.
Also Read: Bitcoin 1 – Western Union 0
Like a flight, each block only has so much room for transactions. Transactions which pipe funds from multiple addresses (and to multiple addresses) take up more space than those which only move funds from one address to another. This could be likened to luggage. As you know, airlines charge extra to those who want to bring more luggage than others. It’s only fair, they’re taking up more space, right? Those who want the convenience of moving their funds faster are willing to pay for it. It’s that simple.
To move funds securely should not be free, I don’t think anyone’s ever suggested that. The only way it should be free is if you, yourself, are physically handing the funds over. In that situation, you take the risk of losing the funds upon yourself, and that in itself is enough of a fee. (Let’s not get started on the taxes involved with that, though.)
Here is an example from my personal life.
For my birthday last year, my friend in Baltimore decided to send me $50 US. He did this using Western Union, and their handling fee was an astronomical 10%. If I want to send $50 in Bitcoin to my friend using the Electrum wallet, the minimum allowable fee on that particular platform is 20,000 Satoshi or a little under five cents – .001%. But Western Union isn’t even the worst gouger competing to move other people’s money, as the below infographic explains. The minimum allowable fee on the Bitcoin core wallet, however, would be zero. But the goal usually isn’t to get out of paying these incredibly low fees.
If you agree that miners securing the network and adding new Bitcoin to the economy is a good thing, then paying minimal fees when transferring funds is not out of the question. But the egalitarian and libertarian spirit of Bitcoin makes things such that paying no fees will always be an option. Arguably, there are certain instances, like donations to charitable organizations or other causes, where expecting not to pay for the privilege is not unreasonable. A real-world parallel for this would be the way that fiat donations are very often tax deductible.
If you’re still not convinced of Bitcoin’s remittance superiority across time zones (or even just across town and/or over the counter), have a peek at the following informational graphic. It breaks down the many ways that money handlers happily bilk their customers out of money – on both the sending and receiving end – while slyly purporting to do just the opposite.
Last modified: January 3, 2020 3:31 PM UTC