If you decide to explore crypto trading or investing, it’s of prime importance to clarify the major financial issues. Many newbies do not know that they have to pay transactions fees apart from the nominal price of the coin itself.
The transaction fee is the difference between the number of tokens sent and the number of coins received. So it’s necessary to understand that the final block reward sum is formed from two elements – transaction fee and block subsidy. That’s why if you decide to trade bitcoin, it’s not a good idea to choose offers with the lowest transaction fees. The thing is, the miners won’t just select such blocks. As a result, your deal fails, and you get no profit.
Moreover, there is one more thing you should know about transaction fees. They are to increase when the network volume rises. So it’s clear that for bigger transactions, more considerable fees will be charged.
Transaction Fees Explained
Blockchain transaction fee 2021 may vary from coin to coin. Bitcoin is characterized by the highest transaction fee. At the moment, it’s about $2,7 or 0,000061 BTC. By the way, at the beginning of the year, the payment reached its highest price within the last three years. It was almost $63. As for the Ethereum transaction fee, it’s about $24 now. In April 2021, the ETH transaction fees even managed to overtake BTC. Traders were to pay almost $70 for transactions.
At the same time, there are also cryptocurrencies with the lowest transaction fees. They include Nano ($0), Digibyte ($0,0005), XRP ($0,00078). Nano coins have no inflation. Zero payments are built into the protocol. Yet, the profits you may get when trading this digital asset are not rather high. DGB coins are characterized by high inflation. It means you risk losing your holdings. The same is true about XRP currency which is significantly diluted all the time.
On the Internet, you can find lots of calculators. With their help, it’s possible to compute how large sums will be and how much you should pay at all. Therefore, it’s better not to ignore the use of such calculators to avoid excessive expenditures. It should also be underlined that some payments are also charged by exchange platforms. They are to be added to the final price you have to pay for crypto operations.
Moreover, it’s necessary to choose the best desktop crypto wallet to store your coins. It should be reliable and support a wide range of cryptocurrencies. Yet, the most crucial feature of the digital wallet is its security.
It should be highlighted that transaction fees are an essential element of readers’ security. Sounds weird, doesn’t it? But it’s really so. Such payments can reduce the possibility of various spams. The higher the costs are, the fewer spammers can try to cheat the system.
So, when trading, it’s necessary to be attentive to details and consider all the expenditures. Moreover, it’s not a good idea to choose the best exchange options depending only on the size of transaction fees. Instead, it’s better to clarify all the information and use the online calculator to figure out how much you will pay.
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