Enormous transactions are always real jaw droppers. However, they tend to take a lot of time to process, contain enormous fees and a lot of paperwork. Thanks to cryptocurrencies, this is now a piece of cake!
A Transaction of 1 Billion Dollars
Even when owning it, one does not simply send one billion US dollars to another person. Normally, this’d be quite the ordeal involving a lot of paperwork, different people working on sorting it out.
This was definitely not the case this January, however, when someone moved over 1 billion dollars’ worth of Bitcoin. This massive total of 124,946.6 Bitcoin only took a few minutes to be received by the end user and the fees for the transaction only consisted of $83,-. No paperwork needed.
This is far from the first cryptocurrency transaction we’ve seen that valued over 1 billion US dollars. In September 2019, another Bitcoin transaction of over 1 billion dollars in value took place. So how come this is so easy and costs so little?
How Cryptocurrencies Empower Easy, Low-cost and Borderless Transactions
Cryptocurrencies can be sent at lightning speed. A Bitcoin transaction would take only around 10 minutes, and some other crypto assets can even do this in a few seconds. Compared to cryptocurrencies, a traditional wire transaction takes quite a bit longer: about 24 hours if it’s a national transaction. For international ones, this can be anywhere between 1 to 4 days. When using cryptocurrencies, it doesn’t matter which country you’re sending money to – the transaction speed remains the same.
How it can be this fast, you ask? Thanks to relying on a decentralized, peer-to-peer network that relies purely on computing power and maths: a blockchain. There’s no middle man that needs to go over all transactions – just a network that handles them efficiently. This ensures having a lightning fast transaction speed.
Another thing entirely is fees. In traditional systems, even national transfers can contain fees for wire transactions. When you get to larger transactions (especially in the case of the $1.000.000.000 transaction mentioned previously), this can rapidly increase and the charges will stack up quickly. This gets even worse when it’s an international transaction – even for the smallest amounts, you may get significant fees. This article lists average wire transfer fees per bank in the United States – you’ll see that even for national wire transfers, the average fee can easily rank between $20 and $30.
Thus crypto comes to the rescue: fees are only a fraction of these costs. The average fee of Bitcoin transactions is currently at just $0.50 and it has only decreased in the past year! Some other cryptocurrencies can even feature virtually free transactions. On top of this, it doesn’t matter how much you are sending – this has little impact on your fees. With crypto, fees for transactions are significantly lower than traditional wire transfers.
National, International – this all means nothing to Bitcoin and cryptocurrencies. Whereas the transaction speed and fees are drastically increased with traditional wire transfers, with crypto there is absolutely no difference when you make an international transaction. Even worse: some financial institutions wouldn’t even allow you to transfer your own money abroad. In case of physical transfers, its sender and receiver will need to identify themselves and provide personal information, leaving a lot to be desired when it comes down to privacy. Cryptocurrency networks don’t check where you are from. It doesn’t matter whether you’re from Japan or the United States, all transactions are treated as equals, individuals are kept private and everyone is free to join the network.
As such, cryptocurrencies are the optimal method of making international transfers of any amount.
With traditional financial institutions, access to your money can be limited. One can think of the opening times of their office or only being able to withdraw your own money up to a certain amount. This underlines all the more how your money is in their hands.
Cryptocurrencies on the other hand empower everyone to have total control over their own hard-earned money. Your funds are available to you 24/7 and you can do with it as you please. No one can tell you what to do with your own money as you are the only one who has access to it. With crypto, you are in control of your funds and have financial freedom.
In short, with crypto you are part of a lightning fast and borderless financial network that uses low fees and where you are in full control of your own money. At Ledger, we strongly believe in the power of cryptocurrencies such as Bitcoin and their limitless potential.