Bitcoin Negative Balance! Something that not many are familiar with, but something that bites those who know what it is.
If you remember, one of your worst experiences with banking is when you get charged an ‘overdraft’ because you’ve gone over your balance.
Each time you use your debit card without enough balance to buy a cup of coffee, you would get charged a fee, and your balance would go negative. And, you know what? Your bank wouldn’t even bother to warn you about that to let you rack up more charges. You can’t even shut off that feature, because banks make profits with such predatory practices.
This is one of the many other examples of banking greed and incompetence that you’d have come across. And, you can’t just stop yourself to use the banking services, even after being a victim of the system.
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Bitcoin Negative Balance: A Problematic
Every time you send BTCs, there’s a mining fee involved in the transaction execution. Being newbies, many users who needed to send a small amount of bitcoin, $2.50 for example, they needed to send the same amount.
Since they are newbies, many of them don’t understand how much bitcoin they would get back. After succeeding with their first transaction, which is usually a gruelling affair for a non-technical person on a mobile device, they become clueless to discover that they need another $0.55 of bitcoin to send their $2.50.
The Solution to Only a Few
There are exchanges (not many) which literally don’t want their users to feel any pain and added the feature which would spare them the mining fee so that the users may execute their transactions without hassle.
Paxful can be a good example of this.
However, initially what this bitcoin company did was not satisfactory to its users. They paid the mining fee which came from their own pocket. They thought that they were doing a favour to their users by paying the fee on their behalf so they could carry on with their business.
The aim was that the users’ account wouldn’t go negative, and the next time they would use it the miner fee would come from their new purchase. It was like an interest-free loan.
But this didn’t go as expected as it turned a bad communication which caused people pain. The reason was that the company didn’t make it clear to the people that there was a fee and they were paying it for them, so when the users come back to use their account, they don’t see the negative balance and wonder about that.
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Not A Complex Situation Any More
The company is no longer paying the mining fee on behalf of its users, and will not let you send the bitcoins unless you have adequate funds in your account. The use-case where people needed to send those ultra small amounts is no longer an issue, so the company felt the little loan was not needed anymore. In short, cryptocurrencies are not shady scheme.
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