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You don't have to imagine, because VISA is a public company. According to their 2021 financial report (year end Sept 30, 2020), VISA logged $8.3B in operating

You don't have to imagine, because VISA is a public company. According to their 2021 financial report (year end Sept 30, 2020), VISA logged $8.3B in operating expenses. The majority of this is "personnel" at $4.2B (covering the salaries, benefits, etc. for their staff), $0.7B is "network and processing" (covering the expenses to operating their payments network), and the remainder is stuff like general administrative, marketing, professional fees and legal fees. But for comparison I'll use the $8.3B in total operating expenses. Over the same period VISA processed 164.7B transactions, so if you divide you get that on average it costs VISA $0.05 in total expenses to process a transaction, of which $0.004 is for actually operating the payments network. By comparison, it currently costs the Bitcoin network $176.39 to process a transaction (transaction fees plus block rewards per day / total transactions per day), over 3500x the expenses of VISA. Maybe you'll say that's still not the same thing, because "total transaction fees" represents _revenue_ to miners, not expenses. Fine. VISA's revenue over the same period was $24.1B, which works out to revenue-per-transaction of $0.14. That's still over 1200x as much as VISA. https://s29.q4cdn.com/385744025/files/doc_downloads/Visa-Inc_-Fiscal-2021-Annual-Report.pdf https://s29.q4cdn.com/385744025/files/doc_downloads/Visa-Inc... https://ycharts.com/indicators/bitcoin_average_cost_per_transaction https://ycharts.com/indicators/bitcoin_average_cost_per_tran...

metabagel 5y ago
I think the penultimate sentence in your comment should start, “Bitcoin miners’ revenue over the same period…”
- bzbarsky 5y ago
  No, that sentence looks correct: if you treat bitcoin transaction fees as revenue, then you compare to Visa's revenue, which was $24.1B.
MitPitt 5y ago
For some reason you only decided to include VISA, while I meant the whole traditional finance system, including central and other banks. VISA can't operate by itself.
- vorpalhex 5y ago
  Your local bank branch running a few ATMs is not exactly a mining farm and provides other services other than "processing transactions". Even the central banks are just office buildings with regular data centers.
  - MitPitt 5y ago
    You missed the part where I said that this is not about electricity but man hours. Those office buildings are filled with people whose whole lives are to be spent managing these traditional finance institutions. That wastes much more energy, money, and human life.
- gokdisjtrdcvv5 5y ago
  I’m confused. How would adding more stuff change the picture that dramatically? No matter how you slice it Bitcoin has extremely prohibitive transaction costs
  - latchkey 5y ago
    I wouldn't describe the fees as "extremely prohibitive"... https://ycharts.com/indicators/bitcoin_average_transaction_fee https://ycharts.com/indicators/bitcoin_average_transaction_f... "Bitcoin Average Transaction Fee measures the average fee in USD when a Bitcoin transaction is processed by a miner and confirmed. Average Bitcoin transaction fees can spike during periods of congestion on the network, as they did during the 2017 Crypto boom where they reached nearly 60 USD. Bitcoin Average Transaction Fee is at a current level of 1.560, down from 1.798 yesterday and down from 15.45 one year ago. This is a change of -13.20% from yesterday and -89.90% from one year ago."
    - gokdisjtrdcvv5 5y ago
      Obviously it depends on the use case but for most things it is. Not only is it random but 1.5 dollars is a lot! I think PayPal is like .3 + 2.3 percent? Basically anything under $5 would be almost impossible to sell. Not only that but having a chance for the fees to go incredibly high ($15) it’s just not worth it.
jollybean 5y ago
To also be fair, most of VISA is overhead and marketing. Only a tiny fraction of the costs have anything to do with the actual network. Also, the most important thing, is power and incumbency. VISA made sense 50 years ago - it was a financial innovation. But now, they refuse to adapt their pricing, and the cost is just not worth it. The Banks are raking it in in processing charges that are not commensurate to the value created. This is actually the 'true hope' of Crypto, that we can get around ugly costs. Do you know when smartphones first started, Verizon and AT&T were charging 5 cents each to visit those stupid little WAP pages with a bit of text and a few combo boxes? Imagine if the internet was ruled by Verizon and AT&T and their 5-cents-per-visit crap pages. I loathe BTC and most of the Crypto world because it's all MLM, but, as a currency there's definitely material opportunity there.
- pwinnski 5y ago
  Processing charges? Compared to what? The processing charges of BTC or ETH?
  - jollybean 5y ago
    Every single digital transaction visa VISA/MC etc. is taking 2-3% off the top. That's ridiculous. Those fee structures were designed for an alternate universe. It made sense in 1970 - not on the internet today. If we invented an 'interbank exchange' scheme today, which would probably include some decent form of identity management, it could operate at less than 1/10th of that fee. The entire industry, which is controlled by the banks, is pure incumbency. Not only is there value lost to that tax, but that network holds transactions back to some extent. The real economic value of crypto is there, not in the current form of deflationary shenanigans.
dingalot 5y ago
> it currently costs the Bitcoin network $176.39 to process a transaction Depends. With the Bitcoin lightning network live now it's only a tiny fraction of that price. I use FLUX for my crypto transactions: 0,00002951 USD per transaction, and that is PoW! LTC (Litecoin) is another great coin with super cheap transactions. There are so many :) I often see on HN the mostly negative comments and attitude against this new technology, why? Do you really think the current system is better? With all the Quantative Easing (read money printing at the tax payers cost -> inflation), corruption, name it.. Soon your government will present you a new digital wallet based on the same tech. Only with one difference compared to the original crypto currencies: they will have full control over your wallet. And your wallet will have smart contracts, so they can decide where you are allowed to spend you money on and on what conditions. Let that sink in for a while before you start criticizing the real decentralized crypto currencies. Crypto currencies are a dream come true and everyone should embrace it.
- LordDragonfang 5y ago
  > With all the Quantative Easing (read money printing at the tax payers cost -> inflation), corruption, name it.. I'll take steady, minor inflation over crypto's love affair with hyper-deflation for Bitcoin, hyperinflation for most altcoins after their bubbles burst, and general instability. And you want to talk about corruption? Crypto has a new scandal, scam, or rugpull nearly every month, and that's not even limited to altcoins. Then there's the whole thing with NFTs, which I repeatedly seen linked to the money laundering that used to go on in the art world[1]. Bad actors are attracted to crypto precisely because it's decentralized and unregulated. It's a dream come true for them, certainly. [1] https://techcrunch.com/2021/03/24/nft_users/ https://techcrunch.com/2021/03/24/nft_users/
  - ClumsyPilot 5y ago
    According to panama papers, professional money launderers mostly use normal bank accounts and offshores just fine.
  - satronaut 5y ago
    you want to talk about corruption? look at pelosi's investment portfolio. Minor inflation? Look at the cost of food and housing (which are left out of the CPI to make things look less bad)

metabagel 5y ago

I think the penultimate sentence in your comment should start, “Bitcoin miners’ revenue over the same period…”

bzbarsky 5y ago
No, that sentence looks correct: if you treat bitcoin transaction fees as revenue, then you compare to Visa's revenue, which was $24.1B.

MitPitt 5y ago

For some reason you only decided to include VISA, while I meant the whole traditional finance system, including central and other banks. VISA can't operate by itself.

vorpalhex 5y ago
Your local bank branch running a few ATMs is not exactly a mining farm and provides other services other than "processing transactions". Even the central banks are just office buildings with regular data centers.
- MitPitt 5y ago
  You missed the part where I said that this is not about electricity but man hours. Those office buildings are filled with people whose whole lives are to be spent managing these traditional finance institutions. That wastes much more energy, money, and human life.
gokdisjtrdcvv5 5y ago
I’m confused. How would adding more stuff change the picture that dramatically? No matter how you slice it Bitcoin has extremely prohibitive transaction costs
- latchkey 5y ago
  I wouldn't describe the fees as "extremely prohibitive"... https://ycharts.com/indicators/bitcoin_average_transaction_fee https://ycharts.com/indicators/bitcoin_average_transaction_f... "Bitcoin Average Transaction Fee measures the average fee in USD when a Bitcoin transaction is processed by a miner and confirmed. Average Bitcoin transaction fees can spike during periods of congestion on the network, as they did during the 2017 Crypto boom where they reached nearly 60 USD. Bitcoin Average Transaction Fee is at a current level of 1.560, down from 1.798 yesterday and down from 15.45 one year ago. This is a change of -13.20% from yesterday and -89.90% from one year ago."
  - gokdisjtrdcvv5 5y ago
    Obviously it depends on the use case but for most things it is. Not only is it random but 1.5 dollars is a lot! I think PayPal is like .3 + 2.3 percent? Basically anything under $5 would be almost impossible to sell. Not only that but having a chance for the fees to go incredibly high ($15) it’s just not worth it.

jollybean 5y ago

To also be fair, most of VISA is overhead and marketing. Only a tiny fraction of the costs have anything to do with the actual network. Also, the most important thing, is power and incumbency. VISA made sense 50 years ago - it was a financial innovation. But now, they refuse to adapt their pricing, and the cost is just not worth it. The Banks are raking it in in processing charges that are not commensurate to the value created. This is actually the 'true hope' of Crypto, that we can get around ugly costs. Do you know when smartphones first started, Verizon and AT&T were charging 5 cents each to visit those stupid little WAP pages with a bit of text and a few combo boxes? Imagine if the internet was ruled by Verizon and AT&T and their 5-cents-per-visit crap pages. I loathe BTC and most of the Crypto world because it's all MLM, but, as a currency there's definitely material opportunity there.

pwinnski 5y ago
Processing charges? Compared to what? The processing charges of BTC or ETH?
- jollybean 5y ago
  Every single digital transaction visa VISA/MC etc. is taking 2-3% off the top. That's ridiculous. Those fee structures were designed for an alternate universe. It made sense in 1970 - not on the internet today. If we invented an 'interbank exchange' scheme today, which would probably include some decent form of identity management, it could operate at less than 1/10th of that fee. The entire industry, which is controlled by the banks, is pure incumbency. Not only is there value lost to that tax, but that network holds transactions back to some extent. The real economic value of crypto is there, not in the current form of deflationary shenanigans.

dingalot 5y ago

> it currently costs the Bitcoin network $176.39 to process a transaction Depends. With the Bitcoin lightning network live now it's only a tiny fraction of that price. I use FLUX for my crypto transactions: 0,00002951 USD per transaction, and that is PoW! LTC (Litecoin) is another great coin with super cheap transactions. There are so many :) I often see on HN the mostly negative comments and attitude against this new technology, why? Do you really think the current system is better? With all the Quantative Easing (read money printing at the tax payers cost -> inflation), corruption, name it.. Soon your government will present you a new digital wallet based on the same tech. Only with one difference compared to the original crypto currencies: they will have full control over your wallet. And your wallet will have smart contracts, so they can decide where you are allowed to spend you money on and on what conditions. Let that sink in for a while before you start criticizing the real decentralized crypto currencies. Crypto currencies are a dream come true and everyone should embrace it.

LordDragonfang 5y ago
> With all the Quantative Easing (read money printing at the tax payers cost -> inflation), corruption, name it.. I'll take steady, minor inflation over crypto's love affair with hyper-deflation for Bitcoin, hyperinflation for most altcoins after their bubbles burst, and general instability. And you want to talk about corruption? Crypto has a new scandal, scam, or rugpull nearly every month, and that's not even limited to altcoins. Then there's the whole thing with NFTs, which I repeatedly seen linked to the money laundering that used to go on in the art world[1]. Bad actors are attracted to crypto precisely because it's decentralized and unregulated. It's a dream come true for them, certainly. [1] https://techcrunch.com/2021/03/24/nft_users/ https://techcrunch.com/2021/03/24/nft_users/
- ClumsyPilot 5y ago
  According to panama papers, professional money launderers mostly use normal bank accounts and offshores just fine.
- satronaut 5y ago
  you want to talk about corruption? look at pelosi's investment portfolio. Minor inflation? Look at the cost of food and housing (which are left out of the CPI to make things look less bad)