The Fiat Transaction Cost is higher than ETH Gas Fees

The one criticism Ethereum receives almost always is the high gas fee it requires to transact in the blockchain. There could be many factors impacting the transaction cost. I am not so sure about my technical prowess to decipher the associated problems and subsequent solutions. But, I firmly believe that the cost we are paying for those ETH transactions is not uncommon or unheard of. Do you know how much it costs to transfer your money across the political border you are in now?

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For this Thanksgiving, I wanted to gift my parents a small amount to spend on things as I will not be visiting them this year. We have your centuries old mature banking system that works with these international money transfer agencies as the middlemen. The cost to send 200 $ is at around 15 $ which is 7.5% of the total value. And, it will take 4-5 business days to complete the transaction. The value of gas fees on ETH blockchain is higher because the value of ETH in terms of USD is higher. When we consider gas fees in terms of ETH, it should be lower than 7.5% most of the time.

Yes, there are many other money sending apps available these days but none of them work independently to transfer money from one place to another without contacting the banks. It is funny as these tiny transfers meet with more scrutiny by banks but the trillion dollar money laundering scams are done very efficiently.

When we compare the money transfer transaction cost with the gas fee we are paying in blockchain then I am not very surprised that this 5 year old still growing blockchain is not super efficient. The evolution will take time and hopefully the future version of ETH or any other blockchain will reduce the red-tape, bureaucracy and the private data-gouging that is happening right now.

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