I hate to break it to you, but even though it may not be 4% spreads Russian is right on this
Hate to break it to you, but he's not.
but even though it may not be 4%
first of all, why don't you call him out on his bull shite lies and deceit?
but not only that, LSURussian is so fricking stupid that he was likely confusing day high/low prices with bid/asks when he made his grand claim of 4%. Of course, he won't admit that.
You have to double you spreads to get to your total transaction cost expectations
Fair enough. But if you do that with the numbers in the screenshot I posted earlier, it comes out to 3.18% or total (.6 twice for the spread, .99 twice for the conversion on each end).
You have a valid point, however, about being able to fill orders. Obviously right now in the bitcoin market, any large orders will effect the price. So, while the original scenario didn't specify a total price to be transferring, anything under a couple hundreds should be fine.
And finally, you and I both know that as the bitcoin market matures that this will become less and less of an issue.
And just for completeness, I just want to demonstrate how this could be done in real life right now and what the costs would be.
Scenario 1: Entity 1 already has bitcoins. Entity 2 wants US dollars. Entity 2 has an account with BitPay. Entity 2 requests Entity 1 to send $100 worth of bitcoin at current market prices. Entity 1 sends them (zero transaction fee through the bitcoin network, or if chosen, 0.0001 bitcoin fee). BitPay processes the transaction, charges Entity 2 0.99% and deposits the rest in US dollars in the Entity 2's bank account the next day.
Scenario 2: Entity 1 does not have bitcoins. Entity 2 ultimately wants US dollars. Entity 1 has an account on an exchange and has already funded it with US dollars. Entity 1 purchases the bitcoins (0.2% fee on BTC-e) and sends them to Entity 2. Entity 2 has an account on Coinbase, and sells those bitcoins on Coinbase for a 1% fee, and the US dollars will be deposited in Entity 2's bank account in 4-5 days.
There are many variations on this and you can mix and match many services.
The crux of this whole ridiculous debate however is y'alls insistence on returning to US dollars. And while that may be a concern now, the goal is that it won't be necessary.
I readily admit that converting to and from fiat adds greatly to the cost, but that's not a reflection on bitcoin at all, that's a (negative) reflection on the legacy money system and all it's difficulties and regulations.
Surely you can admit that bitcoin to bitcoin transactions are extremely cheap compared to traditional money transmitters, right?
You're using "optional" loosely here. So you can incentivize a miner to place your trade in their block for execution, or you can't.
I say optional because right now it truly is optional. I have done many recent transactions with no fee and they get confirmed very quickly. Will it always be this way? Probably not. But even when fees do become de facto mandatory, they will still be very cheap, and the amount being sent is irrelevant, unlike with traditional transmitters. You can send $1 or $1,000,000 for the same amount in transaction fee in bitcoin.
A third party has to exist, especially at this point in time for bitcoin. Hell even in the future bitcoin will never get broad based acceptance without third party type payment mechanisms, and these third parties will want to get compensated. No matter what you're not going to avoid fees, I can't guarantee many things but I can absolutely guarantee this.
I don't necessarily deny this. They will be convenience providers and they will get compensated for their services. The difference, however, is that the users at least have the option to DIY. For instance, a web site could write their own bitcoin processing software, or they could just use BitPay and pay the 0.99% fee. But at least they have a choice. Can I do that with credit cards?
This post was edited on 7/9 at 6:58 pm