Cryptocurrency: The Good, The Bad, and The Future of Money Supply
Hackernoon
2K12

It seems that one of the claims for BTC is ‘low transaction fees’. Nothing could be further from the truth.

Current direct fees are around $5, but have recently been above $16. https://bitinfocharts.com/comparison/bitcoin-transactionfees.html

This is regardless of the amount transacted… so not much good for a cup of coffee.

But that’s only the start of the problem.

BTC already consumes more electricity than Ireland and if demand for the coins was to keep increasing at the projected rate it could consume a large percentage of the world’s electricity within just a few years. https://digiconomist.net/bitcoin-energy-consumption

Each transaction now costs around the same in electricity as 9 US households use in a day, approx $36 (very rough estimate, but the right order of magnitude). Making for a very expensive coffee indeed!

But this is only the base transaction cost. The true cost is hidden in the rising price of the coins themselves.

Effectively, the rising price represents a transfer of purchasing power from the wider community to coin holders just to effect the transactions.

Since inception to 1 Dec. 2017, there have been 277,040,706 transactions. (Anecdotally, most of which have been to trade for fiat or other cryptos, or illicit goods and services, rather than for ‘normal’ transactions that we all use real money for).

https://blockchain.info/charts/n-transactions-total?timespan=all

In the process, we have transferred value to BTC coin holders based on the community’s acceptance of them as a valid financial instrument. How much:

The current (5.06 pm on 3 December 2017) price is USD 11,063.

The total number of BTC on issue is around 16.7 million.

(https://www.statista.com/statistics/247280/number-of-bitcoins-in-circulation/)

This gives a total value transferred of $184,752,000,000 from the community to the holders of BTC as the cost of effecting 277, 040,706 transactions

Giving a cost per transaction of USD 666 for every transaction that has ever been done on the Bitcoin blockchain.

Imagine if instead of hiding the cost in the rising price, we offered a stable crypto, but charged every user a fee of USD 666 for every transaction. You’d want to be buying a pretty expensive cup of coffee to warrant that sort of fee.

There’s no doubt that we will finally get a crypto that has a stable price from the time of issue and that does not consume huge amounts of electricity. But Bitcoin is not it.

We should outlaw it now to get everyone’s focus on a crypto we can actually use as money, instead of supporting this speculative bubble.

See also:

https://www.kaspersky.com/blog/bitcoin-blockchain-issues/18019/

Like what you read? Give Michael Andrew Haines. a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.