Simplifying Hive Bookkeeping
I fell down the rabbit hole of discovering the lowest transaction prices for different cryptos. If you have a retirement account, you will be familiar with fees that the plan administrator will charge for managing your account. On top of that, if the retirement account uses mutual funds instead of ETFs, you stand to lose another percentage of your money every year. When it comes to spending crypto, keep that retirement money in mind. The more you spend on transactions, the greater the compounding effect on your wealth. I'll start with the most expensive crypto to transact and work my way down to the least expensive.
Bitcoin was conceived and created for the purpose of serving as a currency. The idea was for people to be able to transact value in BTC, even down to a fraction of a cent in value. As we all know, this is not possible. The current BTC price is $1.28, which eliminates the utility of using BTC for small transactions. The problem gets worse when BTC has a bull run. Recently the price for transactions was up to around $6. Bitcoin was the original cryptocurrency. However, it fails to fulfill its purpose. It now serves mostly as a trading commodity because of fees.
Ethereum can be used as a currency, except that it too has transaction costs in gas, which can also spike. However, Ethereum wasn't necessarily built as a cryptocurrency. It is more like a decentralized computer. Transaction fees can spike when the network is busy. I won't go into detail with ETH because it was built to solve other problems.
We will start with LTC, which was created to improve upon the speed and transaction costs of BTC. LTC does a good job on both accounts. Current transaction cost for LTC is around $0.0108. LTC does offer fast transactions too. LTC delivered on its promise to be better than BTC as a currency.
Next, let's see Bitcoin Cash. BCH was also built to avoid some of the problems of speed, scalability, and transaction cost, just like LTC. BCH has largely addressed these goals. Transaction fees for BCH tend to average less than LTC fees. However, there are occasional spikes that jump above the price of LTC. However for the most part, BCH is about $0.01 less costly than LTC. Currently, BCH transaction cost is $0.0064. I do not have experience with BCH in terms of how fast it is for a transaction to confirm.
I have been a fan of Dash lately. Dash has very low transaction fees at around $0.0028 today. Like BCH, Dash has consistently low fees that are in the same ballpark as BCH. Historically, Dash has had occasional spikes, the largest transaction fee is at around $1.60 back in 2018. Dash was not alone in that spike. A more recent spike had Dash at about $0.0486 per transaction, which lasted about two days before diving below the price of LTC. Dash is also fast, often clearing faster than LTC.
Ripple has been a complete surprise. Ripple is not a decentralized cryptocurrency in the way the previous examples are. Ripple was built for speed and low cost to serve the banking industry in cross-border payments, tackling SWIFT transactions, which are costly and slow. XRP has the lowest transaction costs and is one of the faster cryptos. Fees for XRP are typically at or below $0.0002. The price does spike from time to time. The most recent spike was $0.0055, which is not earth shattering by any means.
A previously unmentioned cryptocurrency is Zcash (ZEC). I was surprised to learn that ZEC has even lower transaction fees than XRP. The highest prices were also in 2018, with a max at almost $0.005. For the most part, ZEC maintains a lower transaction fee than XRP. The current transaction fee is $1.1400e-5 (1.14 x 10^-5).
In the end, these later iterations of cryptocurrency have been optimizing for people to spend the currencies rather than using them to speculate like currencies on FOREX. Using them to transact would keep more money in your pocket and even offer a few added advantages, like a little bit of privacy, if not complete privacy. They also save you time waiting for confirmations. Ultimately these cryptos will have limitations due to the network effect. LTC and BCH tend to have the greatest acceptance. The rest have growing networks that offer more places to spend.
The reality is, if your goal is to use crypto for commerce, the price doesn't matter, so long as it remains stable enough for you to conduct your business. In this case, the faster your purchase, the better it is for everybody because it ensures settlement at the agreed upon price. Settlement is challenging with slower, more expensive transactions. Trading is beneficial to cryptos in that they provide liquidity for conversions. However, trading has the side-effect of making prices bounce around wildly and increasing transaction fees.
For buying Hive, I'll be using Dash via Blocktrades. In the US, many of the exchanges that sell Hive are not available to me, if I am compliance-minded. Otherwise, I would just use fiat to buy Hive directly. Hive would benefit from having a larger network outside of the ecosystem so that we can use Hive for commerce. It is both fast and feeless. Something about Hive as a currency is not connecting with the crypto community.
I was going to say that doing commerce with Hive doesn't necessarily mean that users need to be part of the social platform. However, each person needs to have a unique address and get their keys, which can only be done by signing up for the full monty. I may not want a social media account to use my Hive for commerce; but, there is no separating one from the other. And, once you have that, anybody can see your transactions. Other cryptos at least require some minor degree of nerding to be able to track transactions to a wallet. Perhaps the lack of privacy is the biggest hurdle to selling the zero fee Hive experience.
Posted Using LeoFinance