Crypto currencies : already one year has gone !
One year ago, we setup Bitcoin payment on our brand new website. So now is a good time to review our experience and decide what next.
To make it short, all is not perfectly clear for instance, especially environmental problem caused by “proof of work” electric consumption. However since French authorities currently enjoy if companies try to become expert with blockchains technology, as one can see there: https://www.entreprises.gouv.fr/fr/etudes-et-statistiques/autres-etudes/verrous-technologiques-des-blockchains
We decided to continue with our experiment while setting up a new payment module that can handle numerous crypto currencies among whose some are claiming environmental performance. And we added the promo code CRYPTO (50 % discount for the first one to use our new crypto.com Pay module) as an incentive.
It took a small month before someone uses our Blockonomics module. It’s both victory and failure. Victory because it was our first order from Canada. Failure because we did not tune everything correctly and bitcoin has been lost in a segwit address. So bitcoin are little more difficult to handle than regular bank account even if still affordable.
However we still lack our second bitcoin transaction after few month and we start to inquiry why. We discovered a vast information jungle with two main controversial topics: energy consumption and transaction fee.
For energy consumption topic, we selected those two seemly reliable sources:
Note we directly asked Cambridge University to check whether they recognize this page as part of their institution work.
As an important actor of crypto currencies area, Bblockchain.com publish statistics that are widely used.
But data coming from those sources still have to be handled with care. For example, energy per transaction is unclear because transaction concept itself is unclear. Blockchain.com talk about 300 000 transaction per day but also talk about 700 000 payments per day on the whole bitcoin network but do not clarify what is the difference between transaction and payment. Similarly, depending whether the “coins returned to sender as change” is included or excluded we talk about millions bitcoins per days or hundreds thousands Bitcoin per day.
And no matter what numbers are used from this panel, average transaction would be far over average monthly income from any country. By the way, platforms which give access to Bitcoin network group transaction to reduce network charge. Given all of that, we will definitely not risk to give any estimation of “true” single transaction energy cost neither try to compare it with regular bank system.
A sure thig is: fee charged by Bitcoin network actors are very small compared to supposed energy cost one can calculate given the data above. So in order to clarify things we did some experiment. We have buy 30€ BTC and we used it to buy something in our shop. Then we changed the BTC received by our shop into Euro. The result is: Our bank charged us 1€80 for payment outside euro zone. The platform we used to buy Bitcoin charged us 0.6 € for that action so we got 29.6 € BTC for 31€80. Payment on our website ran free of charges (as a client AND as a vendor). It will be the same for us as a vendor until we reach the 10 payment limit. After then we should be charged 1% fee (but still no fee for the client). Finally when we exchanged our BTC to Euro the platform we used charged us 0.5 €. Our bank did not charge us anything for that operation.
So it seem that regular bank vs Bitcoin network economic performance is mostly a draw with little advantage for the Bitcoin network at the price of higher complexity. However, even if difficult to estimate accurately, “the proof of work” energy consumption don’t seem to be a faked problem. We thus decided to keep an eye on the topic and open wide the door for alternate crypto currencies. We will make another revue next year.
Last minute ! while testing our new module we discovered that fee are easy to raise up to few € when doing transaction from one operator to anothe. Be carefull.
Picture credit: https://pixabay.com/