Venmo, the PayPal-owned payment service, announced via email to users that its instant transfer service will now charge a 1% fee, with a $0.25 USD minimum, up from a flat fee of $0.25 USD previously.
Venmo allows friends to quickly send fiat money back and forth for free, as long as the money stays within the app, however, transferring that money out of the app to a traditional bank account is where complications arise. Users can still transfer to bank accounts for free, but must wait the standard 2-3 days for clearing. Instant transfers allow the money to be in users’ bank accounts within 30 minutes, but comes with the additional fee.
However, Venmo recently released a debit card that allows US customers to spend money directly from their Venmo accounts. This also comes amid the September petition that garnered 25,000 Americans’ signatures asking Venmo to change their default privacy setting from public to private. To date, Venmo said that they have no plans to makes that change.
Cryptocurrencies offer faster, cheaper, and more secure transactions
Bitcoin was founded in the aftermath of the 2007/2008 financial crash as an alternative to the traditional banking and financial system. Bitcoin originally allowed for peer-to-peer transactions for pennies that are processed in 10 minute average block times. As time proceeded, and more confirmations were conducted on each block, the pseudo-anonymous transactions became more secure and immutable. This is a stark contrast to Venmo that is increasing its fees for services that are not as secure. However, the cryptocurrency world has evolved significantly since Bitcoin was first created.
Bitcoin soon suffered network congestion due to its inability to reach consensus on a scaling solution, which eventually caused fees and confirmation times to spike and caused the Bitcoin and Bitcoin Cash split. Bitcoin has now chosen to pursue the Lightning Network as a solution, but this system relies on a hub and spoke like system where the second layer accounts off-chain transactions and only settles the final amounts on-chain after a channel is closed. This has similarities to Venmo’s system and also the traditional banking/financial system where a few parties control most transaction gateways. Meanwhile, other cryptocurrencies emerged that offered even faster and cheaper transactions, while still remaining decentralized and secure.
“Dash is pursuing a model that will allow users to make payments and also not affect the liquidity of user funds. For this reason, Dash is competing for a substantially different market segment than any lightning network.”
Dr. Tapp, a researcher for Dash Core Group, summarized this eloquently by describing how Dash is pursuing everyday, peer-to-peer transactions by offering very liquid and instant transfers for nearly zero fees.
Dash enhances cryptocurrency services even further
Dash offers median transaction fees that are around $0.001 USD and are processed with average block times around 2.6 minutes, much cheaper and faster than the median Bitcoin fee of $0.10-$0.20 USD and average Bitcoin block time of around 10 minutes. Dash then leverages its unique Masternode network to offer InstantSend transactions for confirmations in 1.3 seconds for only $0.01-$0.02 USD. Dash now plans to proliferate InstantSend speeds throughout the network to offer users this instant confirmation for nearly zero fees. These features are in addition to the great security of the Dash blockchain, along with optional enhanced privacy features through PrivateSend.
Then Dash has conducted research and stress testing to show that it has the ability to scale to handle much larger traffic levels as adoption rates continue to increase. Additionally, Dash plans to release a series of upgrades through Evolution to make the user experience and user interface of Dash simple like Venmo’s interface to eliminate the learning curve that typically come with cryptocurrencies. These features have been possible because of Dash’s unique Decentralized Autonomous Organization (DAO) that allows Dash to not only have the infrastructure for these technological advances, but to also have the economic incentives to encourages active and productive development.