Bitstamp has officially announced that the minimum trade amount will be changed to $US 5.00 in light of complaints from users.
Users and forum members have complained and expressed their concerns on that the seemingly negligible fee of 0.2% is, in fact, rounding off transaction fees to the nearest penny upwards, which has been adding up for Bitstamp when it comes to micro-transactions.
Previously, the minimum order for a trade was $US 0.86. Therefore, the fee for this amount at 0.2% would result in $US 0.00172 (0.002 x 0.86). This fee would then get rounded off to $0.01 due to Bitstamp’s rounding off method.
A user on BitcoinTalk has explained that this amount is almost 5 times the actual fee of 0.2%. For example, a dollar traded on the exchange would yield a fee of $US 0.01, meaning that the fee of 0.2% promised by Bitstamp is actually 1% instead or a penny for every dollar.
With hundreds to thousands of transactions taking place daily, these fees can certainly result in a hefty sum.
Raising the bar
Apparently, Bitstamp has taken note from one user on BitcoinTalk, Boxman90, who suggested that they change the amount to $US 5. This minimum threshold that will set the applicable fee for users at 0.2% instead of 1% (5 x 0.002 = 0.01) since that is the lowest amount that will make the math constant across the board.
Bitstamp responded by issuing an official press-release:
Dear Bitstamp clients,
On May 15th, 2014 the minimum trade amount will be changed to $5.00.
Bitstamp’s accounting system rounds trading fees to pennies. To greatly reduce the impact of this rounding for our clients the minimum trade amount is being raised to $5.00.
The $5.00 trade minimum will apply to both our web interface and our API.
Reactions from the community
While some responses have
critiqued the move questioning as to why the rounding off policy is not simply
changed the overall reaction has been largely positive with many users saying
this will curb the prevalence of penny-trading bots. Many users have expressed
their gratitude for Bitstamp acting swiftly and positioning themselves as a
legitimate and reputable business.
Garland William Binns III (Bitcoin.org): "I think it's a good thing that Bitstamp has reacted so quickly and addressed this issue. I don't think it will have any negative effect on their transaction volume. Overall, I think it's a good thing for Bitcoin as well - an exchange working closely with the community, to address their concerns and ensure a positive user experience focused on reliability. Thumbs up."