This is my short story on why it’s easier and cheaper to use old fashioned bank wires when you have to transfer money.
I recently decided to open a new day trading account at TradeZero and fund it with a small $5-$6k. Filling out their application and the eventual account approval was a breeze.
To fund the account, I was given two options 1) an old fashioned bank wire that involved an intermediary bank or 2) use WB21.com and bitcoin.
Since international wires sometimes can be confusing with intermediary banks and occasionally require me getting on the phone to confirm wire details (and read out loud routing numbers, account numbers, bank names, addresses), I thought I would bypass all of that and simply buy, transfer and fund my account with Bitcoin. I already have a verified Coinbase account so what can go wrong? This is the future!
Go over to Coinbase and buy 9.5 bitcoins. They charge me $85 to buy them. Understandable business expense I guess.
Then I get a message that they will be deposited in 3–5 days after the ACH is confirmed. Fuck. Ok I forgot but understandable.
4 days later, the bitcoin is deposited into my account but the price of Bitcoin dropped ~$10. Damn an unexpected $95 gone but slightly understandable. It could have easily gone up. Still kind of aggravating that I want to trade stocks and here I am doing technical analysis on Bitcoin wondering if I could have timed it better.
So I log into WB21 and attempt to fund the account so I can send that money to TradeZero. I enter the dollar amount into WB21 and they charge a 1% fee — another $55 fee. WTF?
Screw it, I’m already this far in. I click confirm and I get sent over to a Bitpay invoice with a 15 minute timeout. Back to Coinbase, send the requested bitcoins over to the address specified and I wait.
The Bitpay invoice has a 15 minute timer. So I wait and wait. No payment yet. 10 minutes pass, I check blockr, coinbase and WB21, no confirmations. Down to the last few minutes on that timer so I start to get a bit nervous. What disaster is next?
Add to the stress, Bitpay has a nice reload/refresh button on the timer but it doesn’t do anything. Click and nothing.
The invoice eventually expires and displays a page telling me so. I’m starting to get a bit aggravated but I keep my calm and click the support link thinking that I would just send a friendly notice that the payment is still pending.
I was expecting some type of support portal but instead its a mailto link to some offsite address — a third party domain— seemed really shady to me. Worse off, the domain belongs to some family investment office.
I send a friendly email but shortly afterwards the invoice shows as paid so at least one problem avoided there.
The Last Step
Back to WB21 and check my balance and it’s missing $0.55 cents. Why? I have no clue. I clearly entered $5500 into WB21 for that Bitpay invoice. With their 1% fee, $5555 paid and done and only $5499.45 arrives into my account. $.55 cents — screw it.
I carry on and go to finally make the transfer to TradeZero. I enter my full balance… and it doesn’t allow me. Only whole dollar amounts. Every time I enter the decimal point, some javascript deletes it. Icing on the cake.
At this point, I’m laughing and have had it. I transfer $5499 and am now waiting on TradeZero for confirmation.
And I have a useless $.45 cents remaining in my WB21 which I’ll probably never use again.
Summary
$85 to buy 9.5 Bitcoins @ Coinbase
Wait 4 days, price drops $10 — lost $95.
Use WB21 to fund TradeZero with Bitcoins @ 1% fee = $55
For whatever unknown reason, money arrives -$.55 cents.
Transfer from WB21 to TradeZero but whole dollars only.
$85 + $95 +$55 +$0.55 +$0.45 (still in WB21) = $236 in fees
The Lesson
Fuck Bitcoin and all the fee earning services around it.
Next time, have a pleasant 10 minute conversation with your friendly bank rep to make the wire and happily pay the $35.
Follow Up
I would guess that some Bitcoin defenders will come out of the woodwork to defend Bitcoin.
Look, it’s the whole ecosystem that is fucked. All these fees, complicated steps — it just doesn’t work for the normal Joe.
Until Bitcoin can beat the ease, simplicity and price of a simple bank wire, then it doesn’t even compete.
