Being cryptic is all about having a sensible view of money. We know that Bitcoin (BTC) is the future, both as a value and as a means of payment, as layer 2 solutions like the Lightning Network begin to flourish. It is therefore important that all users of cryptocurrencies ensure that they always receive the most competitive price for each service. Although millions of cryptocurrencies convert fiat to crypto with a debit or credit card, this is by no means a cheap choice.
Paying the cost: Converting fiat to cryptocurrency
According to The Motley Fool, people who use credit cards to pay for cryptocurrencies could be subject to at least a 7% surcharge. For example, if you were to buy $ 1,000 in Bitcoin with a credit card, you could pay up to $ 70 in fees if your card issuer intended to treat the transaction as a cash advance, on top of standard processing fees and charges.
Although cryptocurrencies are globally available, one of the biggest obstacles to the general adoption of cryptocurrencies is not the acceptance of digital assets but rather the bridging of the gap between cryptocurrencies and fiat worlds. Failure to do so has meant that the majority of individuals have lacked the tools needed to communicate with digital currencies or have been met with outrageous costs in communicating with the ecosystem.
An investor or user of cryptocurrency can perform a variety of cryptocurrency transactions, each of which comes with its own cost structure. The cost of any cryptocurrency transaction can change on a regular basis and at short notice, which means users have to be diligent in checking these charges – an operation that is time consuming and less than ideal when moving quickly in and out of places.
We live in an age where so-called disruptive fintech services and applications, such as the digital banking service Revolut, create a seamless banking experience. However, when it comes to turning fiat into crypto, users are stung by expensive clumsy solutions that are more like depositing money in a casino than buying a future form of money.
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Exchanges that fight against entry fees
Stock exchanges like Bitfinex are integrating innovative solutions into their platforms to make the conversion of fiat into cryptocurrencies cheap and efficient. In partnership with OpenPayd, a digital provider of banking and payment solutions, Bitfinex allows its users to transfer fiat currency from their bank account to the Bitfinex platform for just € 50 cents per transaction. At the moment, the service is only available for euros, but the stock exchange intends to roll it out to other major cryptocurrencies.
Other exchanges are also trying to make the purchase of cryptocurrencies cheaper by launching a software development toolkit that will give self-storage wallets like MetaMask the ability to offer users a new way to purchase or transfer wallets to wallets. This aims to optimize the Web3 login experience for users and reduce the fees that users incur when transferring their current cryptocurrency from their accounts to a self-storage wallet / DApp by using these new types of services.
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Reduce costs on board by replacing old-fashioned rails
With the advent of Web3 and cryptocurrencies, the outcome of these payment innovations could very well confirm the 2017 forecast that the age of credit cards may be coming to an end. Major payment solutions and service providers such as FIS and BCB Group are also innovating new fiat-to-crypto solutions together with younger start-ups such as Fireblocks to introduce instant settlement networks between local currencies and stablecoins. These new innovations are likely to turn an old-fashioned payment structure upside down, as a new crop of solutions will be available to all companies that intend to touch cryptocurrencies in one way or another in the coming decades.
As retail and institutional money continue to flow into the cryptocurrency market, almost all major companies are aiming to streamline the on-board experience and make cryptocurrency payments more secure, accessible and instantaneous. By doing so, these companies will reduce the costs of companies that can then pass on savings to customers. Charging high fees just to move fiat currency in and out of the cryptocurrency ecosystem is an unnecessary obstacle for investors. The Fiat depositors used by stock exchanges play an important role in bringing new investors on board the cryptocurrency and Web3 ecosystem.
This article does not include investment advice or advice. Every investment and trading business involves risk and readers should do their own research when making a decision.
The views, thoughts and opinions expressed herein are the sole responsibility of the authors and do not necessarily reflect or represent the views and opinions of the Cointelegraph.
Paolo Ardoino joined Bitfinex in early 2015 and now serves as its head of technology. After graduating from the University of Computer Science in Genoa in 2008, he began working as a researcher on a military mission that focused on high accessibility, self-recovery networks, and cryptography. Paolo, who was interested in finance, began developing financial-related applications in 2010 and founded Fincluster in late 2013. Supporting two funding rounds, Fincluster delivered an advanced, modern and accessible web platform that served different clients with customization options.
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