Overseas Transaction Fees: Sending Money via Bitcoin vs. Banks

Abstract An important feature of every financial system throughout history is its capability to facilitate transfer money in a secure and cost efficient manner. Cryptocurrencies as sources innovative solutions – especially Bitcoin their most prominent representative have offered completely new transmission for piece information that can contain carry value. There are many approaches evaluate (un)successfulness money, arguably one the assess fulfilment inventor’s original proposition: it be used send directly securely abroad, international destinations, without fear double-spending? Moreover, by removing institutions fees from hierarchy, done lower price? The objective creating network (among others) was promote democratization finance enabling monetary transactions over internet unnecessary intermediaries inserting charging multiple layers fees. In decentralized, distributed blockchains such Ethereum subjects incentivized collectively maintain public ledger (blockchain) collecting block rewards (“coinbase”) transaction Block-chain maintenance known mining, miners compensated effort form (and coinbase rewards) verifying transactions. this paper examine compare transferring internationally means Bit-coin network, contrast using traditional pathways, mostly banks, manner scrutinize proof concept cryptocurrency issue transfer. By doing so we attempting provide answers questions functionality cost-effectiveness an alternative based on blockchain technology. Transaction payments made compared analysing novel dataset obtained World Bank Croatian National (CNB). CNB’s data not publicly available, attained specifically. It contains 1.400 types charged 23 banks operating Croatia period October 2018 February 2022. were matched with same period, taken Blockchain.com online service. On average, 1,000 USD abroad required approx. three times less than Croatia. calculation structure bank fees, also presented paper, higher costs sending amounts (in terms percentage); when 200 worldwide average 30 more miners. Additionally, remittances analysed quarterly Bank. Comparative analysis these made, clear (on average) via bears significantly end user, amounts. Due non-normality distributions underlying variables, non-parametric tests applied null hypothesis identical medians rejected. conclusion, needing users obtain decentralized technologies Bitcoin’s blockchain. This finding validates key propositions ledgers. Rather focusing wild daily price swings volatility, functions cost-effective payment proves itself schemes.