LocalCryptos: Ethereum Fees "Hurt the Underserved" Like Venezuelans

LocalCryptos: Ethereum Fees "Hurt the Underserved" Like Venezuelans

By TheDesertLynx | Digital Cash Network | 17 Sep 2020


4bbf64b9fc65e219a4956d9ae5fa3355d3116ee9c36cbeb38f47052d59f1c5c1.jpeg

image

Peer-to-peer cryptocurrency marketplace LocalCryptos claims that high Ethereum fees have harmed its most underserved customers, highlighting users from Venezuela, who allegedly rely on the platform to sell small amounts of cryptocurrency.

In a recent lengthy thread on Twitter, LocalCryptos, a peer-to-peer cryptocurrency trading platform similar to industry staple LocalBitcoins, noted high Ethereum network fees, stated that the company "wasn't celebrating" but instead saw this as a problem for some users:

  • "High network fees hurt the underserved the most. They're a further blow to communities that are already excluded financially from the rest of the world."


As far as we know, more Venezuelans use LocalCryptos than any other #Ethereum DApp. LocalCryptos is the most popular decentralized application among Venezuelans.

LocalCryptos pointed out that Venezuelans primarily use Ethereum as an escape from devaluation of the local currency:

  • "Along with the USD, Venezuelans use cryptocurencies as an escape valve to cope with the deep economic crisis that plagues the country. The 2017 crypto fever helped raise awareness of cryptocurrencies among the people. One of these cryptos was Ethereum. Crypto mining in Venezuela was highly profitable. As an Ethereum mining rig was cheaper than a Bitcoin mining hardware, it became a no-thinker for many.
  • But selling the earned in a secure, P2P way was very difficult with the lack of proper platforms. Enter LocalCryptos. Most Venezuelans use LocalCryptos to safely change small amounts of ETH to bolívars and back. They use this money to pay for goods and services most of the time, so they usually exchange the exact amount they need. On the other hand, they use crypto to get paid for online work, they use ETH to avoid hyperinflation, they use ETH to send money back to their family.
  • More than 70% of ETH trades on LocalCryptos by Venezuelans are under ~$40. That compares to more than ~$400 in China, ~$175 in the US, ~$440 in Russia. The median trade size in Venezuela is the bolívar equivalent of US $20. Despite gas optimizations, a LocalCryptos ETH escrow uses between 102K - 130K gas from start to finish. At low gas prices, that's 20¢. At 500 Gwei, the network fee adds up to more than $21! Yes, if a Venezuelan wants to trade $20 worth of ETH peer-to-peer, it will cost $21 in gas in these conditions."

Litecoin and Dash to solve LocalCryptos's Ethereum Fee Woes

 
According to LocalCryptos, which supports Bitcoin, Ethereum, and Litecoin (with Dash support on the way), both Litecoin and Dash can serve as viable alternatives for users from low-income areas:

  • "Another solution is adding more cryptos. Litecoin is seeing a huge surge in trading volume lately, and we think it also has to do with its little-to-no fees, excellent for small trades. Additionally, Dash (another crypto with almost zero fees) is coming soon to LocalCryptos."

Currently, Litecoin typically processes about 42,000 daily transactions (30-day moving average), with fees well below one cent USD. The median fee did, however, reach $1.41 per transaction briefly in late 2017 due to an influx of network activity, likely a spillover from Ethereum's scaling problems. The network processed a total of about 162,000 transactions that day.

Dash currently processes a 30-day moving average of about 25,700 daily transactions, similarly with a fee well below one cent USD. The Dash network has processed as many as 3.02 million transactions in a single day during a stress test in late 2018, with a median fee still well below one cent. The highest recorded median transaction fee for Dash was $0.14 during a price run-up at the beginning of 2017.

Donate - Sponsors

64d2069d4e04a662131ef859bd97cc1c6b829512b4e2f3b53439568655dcaae9.png
Please leave a tip if you enjoy the content, either here or via any of the cryptocurrency addresses in my CoinTree link. You can also send a message with a CoinTree donation. I'd love to hear from you! Thanks to my recurring donors both anonymous and otherwise!

Support us by checking out our sponsors! Protect your privacy online, sign up to NordVPN with the promo code DCN and get 68% off, or just $3.71 per month, plus an additional month free! If you're tired of YouTube and other platforms censoring and demonetizing creators, what are you waiting for? Join LBRY! Want to live on crypto? Use Bitrefill to buy gift cards or pay mobile bills from more than 1650 businesses in 170 countries quickly, safely, and privately. If don't want search engines like Google controlling your search results and selling your information, join Presearch and get paid to search!


TheDesertLynx
TheDesertLynx

Crypto and liberty lover. Journalist. Living unbanked off of crypto since 2016. Free State Project mover. Opinions are my own.


Digital Cash Network
Digital Cash Network

Documenting the global digital cash revolution, the greatest financial revolution the world has seen in recent times. Opinion, news, podcasts, videos and more.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.