Random Sequence

Here are some figures on transaction costs in cross-border transactions. Currently the de-facto reference currency in cross-border transactions is the USD. A recent purchase of USD186 using the credit card resulted in the following line items in AUD: AUD (from USD) - $202.00 Currency conversion assessment fee: $0.40 International transaction fee: $3.00 Cross border assessment fee: $1.60 Ignoring the spread used in the currency conversion, the transaction cost is about 2.5%. The actual transaction cost taking the spread into account is probably about 3+% A recent purchase of USD700 using PayPal incurred a fee of $23 (buyer or seller pays). The transaction cost is a whooping 3.3%. I happened to have some USD in my account, so I didn't need to perform currency conversion. PayPal's spread in forex rate is notoriously poor compared to other avenues. A purchase of 1.45BTC (approximately USD1085 at that time) incurred a transaction fee of 0.0002BTC, which is negligible.

I have been dabbling with crypto-currencies, specifically Bitcoin and Litecoin, over the past 12 months. Everything from mining to e-commerce to currency exchange. I think I "get" the magic of the whole idea now. For better or for worse, crypto-currencies drastically reduces the friction of money flow. You probably won't be able to find another means of moving money at a lower transaction cost, especially when small amounts are involved. In addition, the speed of transfer is excellent for a distributed system. With Bitcoin, it takes a few minutes. With Litecoin, it takes a couple of seconds. The low transaction fee and fast transfer speed respect no geographical boundaries. It applies whether you are moving money within the same country, or between two countries on opposite ends of the Earth. Which probably freaked more than a few legislators out . Plus this is a distributed system with no central authority to slow things down or screw things up. PayPal is fast, but