Quantifying Cost to Move Between Crypto (ShapeShift)
Getting my thoughts down that may (or may not) help those like me who are fairly new in the diverse crytospace.
So I've been dabbling around with moving between BTC, ETH and LTC. Again probably behind the ball game but i came across Jaxx wallet and that seems great. Polished finish and a seamless experience jumping between crypto.
And looking a little closer I noticed the core piece software that enables these jumps - ShapeShift. A massive company now that has filled in a much needed gap. Handy business model too - I might be wrong but I believe they get a cut each time a transition occurs as Jaxx is utilising their API. And Jaxx gets a cut because they are broadening the user base. And it's all secure with private keys stored locally. So everyone's happy.
That all makes sense to me. What was a little less obvious was the details to the fee rates. I get there is a limit to the amount one can change to based on liquidity behind ShapeShift and that comes up clearly. But without checking out what the current rate is via another information source and then comparing it to what Jaxx displays (while partially going through the transition process) I wasn't totally clear how much the transfer was costing. Have they missed something or is intentional?
Traditional BTC exchanges (eg BITTREX or BTC Markets) are much clearer - eg 0.22% fee for moving between BTC/ETH. And I get the risks involved with leaving funds at these places.
So if ShapeShift proves to be more expensive (which I think it is for some reason) then this just may be the cost for the added benefits of the value it offers to end users - i just haven't gone through the steps of quantifying it yet...
I'm probably over complicating things. I guess what I mean is does ShapeShift work in their transaction fee (as well as the actual blockchain transaction fee) into their exchange rate?
So my thought experiment is in the exchange transaction how do funds reconcile? Eg
Total funds needed to be used for conversion of btc to eth:
1.000125BTC
So say it's,
1btc -> 10 Eth
.0001 blockchain/gas transaction fee
.000025 (exchange transaction fee)
=1.000125btc
Am I going to far? :p