The fees are, in French, the fees that must be paid when performing certain actions in the world of cryptocurrencies. There are different situations where it is necessary to pay a fee. But for the sake of clarity, we will focus only on the two most common.
First, we will explain the fees to pay when using an exchange to buy or sell digital assets. Next, we will analyze the case of miners, the people who deal with processing transactions inside a blockchain. Each time, we will detail how these fees work, and why it is necessary to pay these fees.
Exchange transaction fees
When you use a platform to buy or sell cryptocurrencies, it is necessary to pay transaction fees. The amount of these varies from one exchange to another and in some cases you can get discounts if you have a certain VIP level or tokens linked to the platform.
The fees you pay are used to pay the people who coded the exchange you use and to keep the site up to date. Without that money, programmers couldn’t spend as much time coding secure and user-friendly platforms as possible, so you can buy cryptocurrency with ease.
It is possible to use free exchange sites, but special attention should be paid to these operators. Either the code leaves something to be desired, and you run a big risk to the security of your digital assets. Either the exchange site officially displays that there are no fees, but in fact it is necessary to pay the fees in a roundabout way, such as having to remunerate the miners who take care of the transactions on a DEX ( Decentralized Exchange).
Fees payable to minors
If you are transferring cryptocurrencies to another person, you may have already noticed that it is necessary to pay fees for your digital assets to be sent. These fees are collected in order to compensate the miners who take care of processing the transactions and securing the network.
To transfer a crypto, it is necessary to perform operations that are costly in energy in order to ensure security, particularly in a PoW (Proof-of-Work) system. However, to carry out these transfers, it is mandatory that the person in charge of them has sufficient computing power.
To obtain this computing power, it is necessary to invest in expensive and state-of-the-art hardware. In addition, it is necessary to expend electricity to operate this equipment. Of course, all of this has a cost. It is necessary to pay the miners an amount of money that covers at least the money that they must themselves spend to carry out your transaction.
The importance of trying to pay as little as possible, while paying a minimum
When we have to pay transaction fees, we would all like to be able to pay as little as possible. Indeed, at first glance, it seems to allow us to save money. But is this really the case? Aren’t we risking some problems by wanting to pay as few fees as possible?
It actually depends. If you are using a reputable exchange that has a VIP program or a utility token to reduce transaction fees, then you should definitely go for it. This will save you quite a bit of money, especially if you regularly trade on the site. However, if you use an exotic exchange that charges very low or even zero fees, then you may never be able to recover the coins deposited on the platform.
When it comes to paying transaction fees to miners, it is also possible to pay less than fees by making your transfers at times of the day when network congestion is less important. On the other hand, we advise against using a new cryptocurrency that boasts of having no, or very low, transaction fees. In such a situation, there will be no serious miner with powerful hardware who will want to take care of securing the network on a voluntary basis.
Conclusion on fees
We often find the name ” fees rather than “fresh” on trading platforms in the blockchain universe. As a result, it is a term that must be mastered and understood refers.
On exchange sites, the term fees refers to the fees you will pay for your purchase or sale transactions. When you transfer your cryptocurrencies from an address of wallet to another, the fees are the fees you will pay to remunerate the miners who take care of processing and securing your transaction.
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