When you need the money now

Author's note: This article is part of an ongoing blog about my adventures in the world of alternate currencies.

Camp BX has run into a series of problems which have negatively impacted me. First, a snowstorm in Atlanta closed its office for two days in a row last week. Not only that, the entire city was shut down during that time including all the banks. This meant that no ACH transfers from Camp BX were able to move for those two days. The impact on me was that I still have not received any of the funds I requested nearly two weeks ago. The stressful part was that I desperately needed those funds in order to make a timely house payment as well as pay off some other bills. I even liquidated an investment I had in order to get the money together more quickly, only to be stymied by the weather.

Then yesterday afternoon I learned that Camp BX got hit again. This time its ACH/wire transfer partner decided to not work with them anymore because the partner didn't want to be involved with Bitcoin. After looking at my account it looks like my first ACH transfer request did go through and should hit my bank account Monday or Tuesday, though I'm not entirely sure about that. But my second one got refunded back to my account. Camp BX is recommending that those in urgent need of funds buy Bitcoin and transfer the funds to their wallets. The price of Bitcoin on the platform is reflecting this recommendation, being about thirty dollars higher than on the other exchanges. That would be a great platform to sell some Bitcoin right now… if only I could access the cash. I will have to look more closely at the other funds transfer options, or simply wait until they bring another ACH partner on line.

This past Thursday when I picked up my paycheck from my day job and deposited it into the bank, it turned out to be a little shy of being able to cover the oh so important house payment. But I decided I'd figure something out and I called the lender company and made a phone payment anyway, figuring I'd have a couple days of float.

Then I went into action. I had just learned about Coin RNR, a company which allows you to buy and sell Bitcoins at a set price (which does fluctuate according to the market). The setup is similar to CoinBase in that you can take or leave the offered price. The difference is that with Coin RNR you can get either your fiat or your Bitcoins much faster, even instantly.

If there was ever a time that I needed instant money, it was Thursday evening. Time to give it a try. I gathered together all the Devcoins I could scrape together, sold the Devcoins on Cryptsy, and put my order together. Mazin, the owner, happened to be on chat, so I reached out to him and he talked me through the entire process–not that he needed to as his tutorial and ordering process is very straightforward. It was reassuring to be in contact with the human being on the other end the entire time. I was able to scrape together around $240 worth, which wasn't great, but more than enough to cover the shortfall for the house payment.

I filled out the form and placed my order. I was then instructed to send the exact amount of Bitcoin to the provided address. Well here goes, I thought, and I put in a withdrawal request from my Cryptsy account. And then Mazin and I both waited for that withdrawal to hit his wallet and start confirming. Fifteen minutes later nothing happened. I offered to send a screen shot, and he graciously accepted. Since we're short on time, I'll go with that, he generously offered. Some times those trade exchanges can take ridiculously long to process withdrawal requests, he added helpfully. By then it was too late to request a same day wire transfer, but I had selected next day ACH transfer. Even so, we were getting close to the time that the California banks close.

About twenty minutes after Mazin had told me he'd sent me my cash (though I wouldn't see it until the next day), I realized that in order for Cryptsy to process my withdrawal request I would need to confirm it by email. So that's why my Bitcoin payment to Coin RNR wasn't going through! I quickly hit the email confirm link, then told Mazin on chat what had happened. “It wasn't a Cryptsy problem, but a Cryptsy user problem,” I explained. “I see it now,” he replied. He took a risk to trust me with a payment which not only hadn't confirmed but effectively hadn't even been sent.

Early the next morning I checked my bank account, and the ACH transfer from Coin RNR was there. Wow, that was fast! Now I could relax knowing that when my house payment hit my account there would be enough money to cover it. Whew! Home saved!

The next day I decided to place an order, this time selecting the instant wire transfer option. Once again I gathered together my Devcoins and also some Bitcoin I had, and was able to put together an even bigger order. That order would be enough to pay a couple bills and stock up my all bank accounts so that they would no longer be in imminent danger of getting overdrawn. I placed the order without chatting with Mazin this time. I simply filled out the form, followed the directions and sent off my payment.

Fifteen minutes after my transaction showed three network confirmations I received an email informing me that my bank wire transfer had been initiated. I logged into my fiat bank account and the wire transfer had already come through. Wow! Instant really does mean instant!

I then happily moved my funds around to cover my bases, paid a few bills, and could again relax knowing that no checks would bounce. Lest I give the impression that I'm irresponsible and constantly overdraw my accounts, I need to again say that I was counting on a large deposit from Camp BX to hit my account two weeks ago. My previous transfers from them have cleared just fine, so this expectation was not unreasonable. But not getting those funds at all has put me in a position where I've needed to scramble and would have overdrawn several accounts and bounced all sorts of important checks if I didn't take quick action.

It's when I needed to take such quick action that Coin RNR really truly was a financial life saver. There are few things more frustrating than actually having money but having to scrimp like a poor person and then pay all sorts of bank fees because of an inability to access the money. That was my problem. Thanks to Coin RNR, I was able to access other funds I have–I was able to trade out some additional cryptos and then get the fiat value deposited to my fiat bank account within twenty-four hours, or, if I was willing to pay for it, instantly.

My second infusion of fiat funds turned out to be educational as well. After working with Bitcoin and Devcoins and a few other crypto coins for almost one year, I have gotten used to the nearly instant and inexpensive transfers of such funds from one wallet to another. The normal transaction fee to transfer Bitcoin is 0.0005 BTC per transaction. This works out to less than fifty cents a transaction no matter how large or small the transaction is. Some wallets, such as my PC client, cost as low as 0.0001 BTC per transaction. Devcoin transfers are even cheaper, normally costing one Devcoin per transaction, which works out to around one twentieth of a cent, again no matter how large or small the transaction is. On the higher end are sites like Vircurex which charge 0.002 BTC for each withdrawal. Personally I think that fee is rather high and if they don't lower it, they may well be out competed by Cryptsy, which only charges 0.0005 BTC. But even so, Bitcoin withdrawals from these more expensive services work out to less than two dollars a transaction, which is very reasonable. And the transaction is close to instant. The customer is free to spend the amount following no more than six network confirmations, or one hour's time–same day. Some up and coming cryptocurrencies have been developed to have even shorter confirmation times. For example, NXT transfers take ten minutes maximum to fully confirm. So we are moving closer and closer to true instant transactions, and one hour confirm time is starting to seem quite arcane.

In the fiat world, instant transfers are not the norm. Yes, you can get them but you pay through the nose. Coin RNR charges $25 for an instant wire transfer, and Mazin informed me that he was merely passing on the cost. That's what banks charge to send a wire transfer. But when you need the money now you pay for it. That is still cheaper than bouncing checks. But that is not the end of the paying part. A few hours after I'd received (and spent) my instantly wired funds, my fiat bank slapped on a debit of fifteen dollars. Fortunately I had left some funds behind to cover it. But I had forgotten that the fiat banks hit you coming and going. I paid a total of forty dollars for an instant deposit of just a bit over four hundred dollars–ten percent of my needed funds went into the banks' pockets.

And that's when I realized what a game changer Bitcoin is. Bitcoin provides near instant transactions as the norm, and they don't cost much, not even two dollars. Compare that to forty dollars to get instant transfers in the fiat world, and now I see why the current monetary system is going to have to make some serious adjustments. When you have a monopoly on anything that people need, you can charge through the nose for it. But the moment you have a competitor who charges a fraction of the cost, you have to adjust or you risk running out of business. Bitcoin has the potential to be that competitor. Once word gets out that it exists, people aren't going to be so willing to pay forty dollars for something they can get for less than two dollars elsewhere. Merchants who have begun to accept Bitcoin in payment have also learned through experience that it costs them less to do so as well. When the tipping point is reached where I can just as easily get what I need with Bitcoin as I can with fiat, then the fiat system will feel the squeeze, because what then would be the incentive for me to ever trade into fiat?

There are two main reasons why I need to change to fiat today. The first is that my utility companies and other services I pay for do not yet take Bitcoin. That part may be true for a long time, though I fully expect to be able to pay Bitcoins for most ordinary retail items within a couple years if not sooner.

The second reason has to do with what the fiat monetary system is based on: debt. Like many Americans I have gotten into debt to have things that I either want or need because for years my income did not match my expenses. I went into debt to buy housing, I went into debt to buy vehicles, and when the price of gas skyrocketed a few years ago I started using my credit cards to fill up the tank so my spouse or I could drive to work. In other words, I am indebted to the system. Getting involved in the crypto world has provided me a means to potentially settle most of my debts, but in order to do so I need to first convert the cryptos into fiat. As I get out of debt, though, I will be more free to keep them as cryptos. Getting out of debt became my goal about six weeks ago when I realized just how valuable (in terms of fiat) my crypto earnings had become.

But in that time I have also begun to experience the difficulties and expenses involved with trading out of cryptos and into fiat. These difficulties have to do with a combination of monopoly and heavy government regulation, neither of which currently exists with cryptos. These issues will no doubt be a part of my financial life as long as I still need fiat money. Thankfully for now, I have Coin RNR to help me get my fiat money delivered to my bank account especially when I need it now.

Devtome writers | Finance

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