Bitcoin for travelers

Is bitcoin a good option as a way of obtaining cash when traveling? On my recent travels from Australia to Singapore I decided to test this. The hope was to save myself from high fees and bad exchange rates at airports and banks.

Here’s the comparison of various different methods of obtaining Singapore Dollars using Australian Dollars

The goal was to keep it as simple as possible; to start with cash and end up with cash, without having to set up or link any accounts. Thus, bitcoin exchanges and anything which requires registration such as travelers cards are immediately excluded. Some people may think this condition invalidates the test, but the process has to be simple and setting up accounts is not simple.

Here are some observations trying to change 300 AUD to SGD

Bitcoin #

ATM #

I attempted to buy Bitcoin via the ATM at The Hub in Melbourne. It was broken - the touchscreen was completely removed, exposing the guts of the machine. It’s a shame because the ATM is very easy to use and generally has a better rate than localbitcoins, especially for small amounts.

Localbitcoins.com #

Another option was localbitcoins, but a quick calculation showed it was not a very good option. Here’s the calculations:

Buying from the most suitable match on localbitcoins at a rate of 540 AUD/BTC would have left me with 0.5555 BTC.

I could trade that for 295 Singapore Dollars on localbitcoins at a rate of 530 SGD/BTC.

GetBitcoin #

The final option I could find was a site called GetBitcoin where I can directly deposit cash at a bank and get bitcoin. The rate was about the same as localbitcoins, but it was more convenient because banks are at fixed, known, and many locations.

300 AUD deposited would result in 0.5555 BTC in my wallet.

0.5555 BTC would convert to about 295 SGD on localbitcoins in Singapore. This is still a really bad exchange rate.

Bitcoin costs #

Converting directly, 295 SGD is about 250 AUD - a massive 15% loss. This is not accounting for fluctuation in bitcoin exchange rate between the time of buying and selling, which may have cost even more (or perhaps worked out in my favor). Even in the best-case scenario, it would be 24 hours between transactions, which can be a long time in the bitcoin world.

Bitcoin summarized #

My reluctant conclusion is that bitcoin is not ready for travelers trying to save money or hassle. It costs a lot more due to the high mark-up involved on both sides of the conversion, and is a massive hassle no matter which approach is taken.

How might this be improved?

• more reliable ATMs
• more people on localbitcoins making it more competitive, thus better prices and more convenience (also Mycelium Local Trader is a new alternative)
• more merchants accepting bitcoin directly so foreign cash isn’t required to buy stuff

Cash at the airport exchanges #

Changing 300 AUD cash at the Australian airport resulted in 290 SGD in my pocket. According to the calculator on their website I should have got about 320 but the fixed fees are extremely high. This is a terrible option, only justifiable by the convenience of being at an airport.

It’s convenient, but it’s also expensive.

Cash from a money changer in Singapore #

The money changer on Orchard Road took my 300 AUD and gave me 348 SGD. Really impressive, fast, and easy. By far the best option.

About the only down side to this is that it doesn’t help when you need some cash to get from the airport to the money changer in the first place.

Cash from an ATM #

Surprisingly, when I withdrew cash from an ATM using my debit card I got a rate comparable with Singaporean money changers. However, there was a 3.5% fee taken out on top of the amount, so if you don’t account for this in the withdrawal (which I didn’t) you can end up taking out more money from the account than expected. The fee is pretty expensive compared to using a money changer.

Conclusion #

Bitcoin as an alternative form of cash conversion for travelers does not feel ready yet for mainstream use. Based on the ease of direct bitcoin-to-bitcoin transactions, It feels like cash-bitcoin-cash should be more useful than it is, but maybe the industry just needs time to grow.

If you’re travelling and want cash, go to a money changer away from the airport because they seem to have the best rates.