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One of the main characteristics that make Bitcoin unique when compared to other currencies is its high portability. Transferring value using Bitcoin is superior to transferring value using other currently used or historical currencies such fiat currency and precious metals due to the following two reasons:
Affordability of value transfers.
Settlement duration of value transfers.
Affordability:
Affordability:
According to data from Blockchain, the average fee per Bitcoin transaction is $3.42. Whether someone is transferring 1,000 Bitcoins (valued at $57 millions on 12/2/2020) or 0.02 Bitcoin (valued at $1140 on 12/2/2020), the transfer fee would remain $3.42.
By comparing the transaction fees of Bitcoin transfers to fiat currency transfers, we notice that Bitcoin transactions are substantially more affordable.
Let's consider the U.S. Dollar transactions fees for example:
According to data from The Ascent credit card transactions fees range between 1.29% + $0.05 to 3.45% + $0.10.
By calculating the credit card transaction fees for a $1140 transaction that costs only $3.42 with Bitcoin, we find that:
It costs $14.706 to $37.52 to make this transaction using a credit card. While the customer is not the party responsible for paying these fees when purchasing products and paying for services, these fees get deducted from the money that the merchant or the service provider receives. Therefore, by decreasing the value transfer fees between customers and merchants, the merchants might incentivized to decrease the price of their products.
Moreover, the average fee for transferring money internationally using wire transfer is around $25 according to nerdwallet. However, Bitcoin transfers fees do not change based on the distance between the sender and the receiver. Whether the two parties live in the same city, country, etc. or not, the Bitcoin transfer fees remain unchanged.
Source: payment depot
Furthermore, money transfer fees are even higher if the one chooses to use a traditional currency such as gold. Imagine someone living in California wants to send value using gold to their sibling who is living in Toronto, Canada. This person would have to carry and transport the gold physically to their sibling, the money spent on airfare, gas, train tickets, etc. would be far higher than transferring the same value using Bitcoin.
Source: Insider
Settlement Duration:
Settlement Duration:
According to data from Blockchain, the median confirmation (settlement) time for Bitcoin transactions is 9.2 mins. This allows the receiver party to have full control over Bitcoins received from the sender in less than 10 minutes.
If we compare the confirmation time of Bitcoin transactions to fiat currency or precious metal transactions, we notice that Bitcoin again outperforms these two options.
Currently, ACH payments which stand for Automated clearing house payments are one of the most common and used fiat currency payment methods. On average, the ACH transfer will take about four business days for standard ACH payments to be completed, and one business day for a same day ACH payment to be completed. Therefore, even with expedited same day ACH payments, it takes one business day for the transaction to settle and reach the receiver.
Moreover, the same example used earlier to show the high cost of transferring physical gold can be used to show that precious metals are inferior to Bitcoin when it comes to settlement duration of value transfers. It undoubtedly requires more than 10 minutes to carry and transfer gold from California to Canada through flying or driving.
To further read about this topic, please consider this article: BTC Branded 'the Most Portable Asset' as 420k Bitcoins Used as Collateral in Q4 of 2020
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