Crypto Replaced Banks With Middlemen In New Costumes: Here’s How
When you send or accept cryptocurrency, it’s easy to think you’re sidestepping the hidden costs of traditional finance. But behind every “instant” transfer lies a maze of gas fees, withdrawal charges, and profit margins that look a lot like the very system crypto promised to disrupt.
Investor Kevin O’Leary recently railed against the problem. “Ethereum, the largest blockchain in the world, got congested and fees skyrocketed past $1,000 just to process small transactions,” he said. “That’s like paying a thousand-dollar toll to drive on a one-lane.”
His warning underscores the growing tension between crypto’s promise of low-cost, decentralized finance and the reality of volatile transaction fees that can make even routine transfers prohibitively expensive. And as stablecoin adoption accelerates, those costs—and who profits from them—are becoming increasingly difficult to ignore.
- See Also: Forget Bitcoin & Ethereum — Citi’s Stablecoin Bet Could Spark A $1.9 Trillion Boom By 2030
What’s Happening?
The new middlemen of crypto—exchanges, wallet providers, and blockchain networks—are quietly building complicated fee structures that rival those of traditional banks. Exchanges like Coinbase (NASDAQ:COIN) and Binance charge transaction spreads and withdrawal fees; wallet apps add service or “network” charges; and blockchain networks, such as Ethereum, collect gas fees that fluctuate wildly with demand.
In effect, users pay layers of tolls just to move their digital dollars from one address to another. As a result, there’s a growing concern about hidden fees and the profit-driven ecosystem around them.
Why Does It Matter?
You’re paying more. By comparison, a traditional cross-border bank transfer through systems like SWIFT or Western Union typically costs $15–$50 and takes a few days. It’s annoying, but the banks disclose the fees upfront. …
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