Excessive conversion costs

Cryptocurrencies might be a low cost and fast way to transfer funds to anyone worldwide; converting fiat currencies to cryptocurrencies certainly is not. If (international) deposits are allowed, users will often face bank transfer fees to begin with. Especially international deposits can be costly, as exchanges can charge a bank transfer fee on top of the already expensive wire operations. If you are sending $200, you should not be surprised if 10-20 percent of this amount is charged in fees. Apart from the cost, this might take up to a week to be processed.

Limited infrastructure

Exchanges do often offer lower fees and faster transaction processing times to local clients. One of the more popular exchanges for Dogecoin, the Canada-based exchange Vault of Satoshi, offers immediate deposits and charges (nearly) no costs to Canadian residents (trade fees are still applicable). To be eligible for this, you do need to live near an office or have a bank account at one of the specified banks. Unfortunately, most countries do not have a local cryptocurrency exchange, and many users are hence forced to use slow and expensive international wire-transfers.

Instant buy

There are other services that offer cryptocurrencies immediately to anyone in the world. If you have a PayPal account, you can quickly buy Dogecoins through WeSellDoges (a verified PayPal account is still required). The convenience, however, comes with a very high price. With a current price of $0.42588 per 1,000 DOGE, the service charges a significant spread above the current market rate of $0.36 per 1,000 DOGE. This equals over 18 percent in fees, although this already includes the trade fees.

Conclusion

All of the previous example concern the initial conversion to cryptocurrencies only, and you should account for even more fees when converting back to fiat currency. It can thus be concluded that the current (lack of) infrastructure takes away most of the potential benefits of cryptocurrencies. Getting cryptocurrencies is becoming easier, but there is still a long way to go.

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