#CryptoFees101 Understanding cryptocurrency fees is essential for anyone involved in buying, selling, or transferring digital assets. These fees can vary significantly based on the type of transaction, the specific cryptocurrency, the platform used, and current network conditions.

Here's a breakdown of common crypto fees:

1. Network (or Transaction) Fees:

Purpose: These fees are paid to the miners (in Proof-of-Work systems like Bitcoin) or validators (in Proof-of-Stake systems like Ethereum) who process and confirm transactions on the blockchain. They incentivize these participants to dedicate their computational power or stake to secure the network and add your transaction to a block.

How they work:

Bitcoin (BTC): Fees are typically determined by the size of the transaction in bytes and the current demand for block space. Users can often choose to pay a higher fee for faster confirmation.

Ethereum (ETH): Fees are called "gas fees" and are measured in "Gwei" (a small fraction of ETH). Gas fees depend on the complexity of the transaction (e.g., a simple transfer vs. interacting with a smart contract) and network congestion.

Variability: Network fees fluctuate dynamically based on network demand and congestion. During periods of high activity, fees can increase significantly as users compete for limited block space.

Who collects them: These fees go directly to the miners or validators, not the exchanges