Please give me an example of an existing system where you can move a large amount of money on pay-as-you-go basis without paying substantial transfer fees.
And please include:
- cost of covering the price volatility risk (so for bitcoin transfers add the cost of hedging volatility and converting from and to fiat)
- cost of maintaining a bank account (so for legacy systems add the monthly cost of keeping a business account with a bank)
The problem is that you don't transfer money in bitshares, you transfer tokens which represent money. To buy a bitcoin with fiat on bitshares you need:
- deposit fiat to gateway -> pay fee
- send fiat IOU to bitshares wallet -> pay fee
- exchange fiat IOU for BTC IOU -> pay fee
- withdraw BTC IOU into gateway -> pay fee
- send BTC to bitcoin wallet -> pay fee
These fees add up. Ideally, it would be good if all transactions on blockchain were dirt cheap, but how do we motivate people to run witness nodes then? Is there any other way than paying them BTS?
That's exactly the point. The whole process is so damn complex at this moment that our internal transfer fees do not matter much - I'm talking here about big amounts, e.g. transferring 100k BTS.
If I transfer 100k BTS I don't really care if I pay 30 BTS or 100 BTS or 1 BTS, because:
- I pay huge fees at all the other steps anyway
- I'm mainly concerned about the complexity of the process, not about having to spend the extra 100 BTS
What would you prefer in case of transferring 100k BTS?
- pay 1 BTS for the transfer fee and have all the complexity and high fees on the gateways
- pay 100 BTS for the transfer fee and have cheap & easy gateways
Improving the gateway process is the key here, not lowering the transfer fees.
And the most important financial incentive for a gateway to come into existence is the referral program (e.g. OpenLedger is about to start this kind of fiat gateway business)
So we need these things:
- efficient gateways and liquidity.
- very low transfer fees for small tips
And we do not need low transfer fees for big amounts. These people can afford to pay more and they will if the process is safe and smooth.