Cryptocurrency Transaction Fees

Cryptocurrency Transaction Fees

Cryptocurrency Transaction Fees

Anytime you want to transfer cryptocurrencies to or from a different address, you will be charged a transaction fee, or gas fee. “Gas fees” are the transaction fees that users pay to miners on a blockchain protocol to have their transaction included in the block. The system works on a standard supply and demand mechanism. If there is more demand for transactions, miners can choose to include the transactions that pay more, compelling users to pay more to have their transactions processed quickly and efficiently.

Most blockchain networks charge a flat fee, while some networks charge based on percentage. Some blockchain networks also allow users to pay more on top of a base fee for a higher priority. A higher priority means a user can complete his or her transaction in a faster time. For example, at the time of writing, a user can pay 37 gwei (ether gas) for low priority and the estimated completion time is 10 minutes. In contrast, the user can also pay 38 gwei for a high priority and can expect the transaction to be completed in 30 seconds.

The transaction fees are often charged in the network’s native currency. For example, any transactions done on the Ethereum network, including ERC-20 tokens, would use Ether as gas. Similarly, Any transactions done on the Binance network, including BEP-20 tokens, would use Binance’s native currency, BNB, as transaction fee.

All of the transaction fees incurred during a transaction are charged by the respective blockchain network and SecuX does not collect any of it. For more information on the amount of transaction fees, please visit the respective blockchain network.

Bitcoin

On the Bitcoin network, certain crypto wallets allow users to set their transaction fees manually. It’s also possible to send BTC with zero fees, but miners will most likely ignore such transactions, meaning they won’t be validated.
Unlike some tend to believe, Bitcoin fees are not dependent on the amount sent but on the transaction size (in bytes). For example, imagine your transaction size is 400 bytes, and the average transaction fee is now at 80 satoshis per byte. In that case, you would have to pay around 32,000 satoshis (or 0.00032 BTC) for a good chance of having your transaction added to the next block.

When network traffic is high, and there is a great demand for sending BTC, the transaction fee needed for speedy confirmation rises as other bitcoin users try to do the same. This may occur during periods of intense market volatility.

Ethereum

Starting with the London network upgrade, every block has a base fee, the minimum price per unit of gas for inclusion in this block, calculated by the network based on demand for block space. As the base fee of the transaction fee is burnt, users are also expected to set a tip, or priority fee in their transactions. The tip compensates miners for executing and propagating user transactions in blocks and is expected to be set automatically by most wallets.

Calculating the total transaction fee works as follows: Gas units (limit) * (Base fee + Tip).

Binance Smart Chain

The Binance Smart Chain transaction fee is very similar to Ethereum transaction fee in terms of fee structure. The transaction fees are denoted in Gwei, which is a small denomination of BNB equal to 0.000000001. Users can set their gas prices to prioritize their transactions added to the block. To find out the current and historical average price of gas, BscScan provides a daily average along with the lowest and highest price paid. As of March 2021, the average fee on BSC is around 13 Gwei.

Tron

On the TRON network, transaction fees are calculated via Bandwidth and Energy, with each user allowed to make about 15 transfers free of charge. In subsequent transfers, the transaction fee is paid according to the Bandwidth used on each transaction.

A certain amount of Energy and computing power is also needed to make each transfer on the TRON network. Energy is not wasted while the transfers that are not dependent on smart contracts are processed and the Energy is calculated as zero. Smart contract transactions and decentralized applications require Energy, and so an Energy charge is levied on transactions, with the amount varying according to the transaction size.

When transferring non-smart contract assets, for example TRX, the energy calculation value is zero. TRX coin transfers, therefore, don’t cost much. However, when the transfer is a smart contract asset, the energy value is higher than zero, meaning the transfer fee is higher.

Ripple

The current minimum transaction cost required by the network for a standard transaction is 0.00001 XRP (10 drops). It sometimes increases due to higher than usual load.

Stellar

Stellar transactions can contain anywhere from 1 to a defined limit of 100 operations. The fee for a given transaction is equal to the number of operations the transaction contains multiplied by the base fee for a given ledger: Transaction fee = # of operations * base fee.

The base fee for a given ledger is determined dynamically using a version of a VCG auction. When you submit a transaction to the network, you specify the maximum base fee you’re willing to pay per operation, but you’re actually charged the lowest possible fee based on network activity.

When network activity is below capacity, you pay the network minimum, which is currently 100 stroops, which is 0.00001 XLM per operation.

Cardano

Cardano’s fee structure is quite simple. Fees are constructed around two constants (a and b). The formula for calculating minimal fees for a transaction (tx) is a * size(tx) + b, where: a/b are protocol parameters and size(tx) is the transaction size in bytes.

In short, Cardano’s fee depends on the size of the transaction and the current fee is around 0.16 ADA.

Bitcoin-like Coins

For Bitcoin-like coins, including Bitcoin Cash, Litecoin, and Digibyte, the recommended transaction fee is 1 satoshi/byte.

Conclusion

Transaction fees fluctuate from time to time depending on network demand and supply and it is recommended to check respective network explorers for the latest fees before conducting a transaction.