Confused by the fees when sending your cryptocurrencies? Why are some super cheap and others a surprise? Today we will break down network fees (or "gas fees") by understanding a key concept: is it the native crypto of a network or a token that lives on another? This knowledge will save you a lot of money and avoid headaches! 💰
1. Native Cryptocurrencies: Your Own Highway 🛣️
These cryptocurrencies are the main coins of their respective blockchains. Transactions are processed directly on these networks.
A) Bitcoin (BTC): Uses the Bitcoin network for its transactions.
B) Ethereum (ETH): Transactions are processed on the Ethereum network.
C) XRP (XRP): Transactions occur on the XRP Ledger.
D) Solana (SOL): Operates on the Solana network.
E) Tron (TRX): Its transactions are executed on the Tron network.
2. Tokens: Guests on Other Highways 🚗💨
These assets do not have their own blockchain, but operate as tokens on an existing network, following its rules and paying its fees.
A) PEPE (PEPE): It is an ERC-20 token, which means it lives on the Ethereum network. Every time you send PEPE, you use the Ethereum network and pay its fees. That's why its costs can vary!
B) Examples on Polygon (MATIC): Many popular tokens have versions that operate on the Polygon network, a Layer 2 solution for Ethereum. This includes "wrapped" versions of ETH and BTC, as well as other DeFi tokens. The advantage is that transactions on Polygon are generally much faster and cheaper than on the main Ethereum network. For example, sending a DeFi token on the Polygon network costs significantly less than on Ethereum.
C) Common Examples on BNB Smart Chain (BEP20): Thousands of popular cryptocurrencies and tokens have versions on the BNB Smart Chain (BSC). This includes stablecoins like USDT and USDC, or "wrapped" versions of BTC (BTCB) and ETH (ETH BEP20). They are extremely popular for their super low fees and high speed, being an excellent way to move value efficiently.
3. Average Fees by Network: How Much to Expect to Pay? 📊
Here’s a look at what you can expect to pay in network fees (remember they can vary depending on congestion):
* XRP (XRP Ledger): Approximately $0.20 USD (fixed and very low). Ideal for quick and inexpensive transfers.
* SOL (Solana): Less than $0.01 USD. Practically free and super fast.
* TRX (Tron): Less than $0.10 USD. Very low and stable for various transactions.
* USDT / USDC (BNB Smart Chain - BEP20): Less than $0.10 USD. The most popular and cheapest option for stablecoins.
* USDT / USDC (Tron - TRC20): Less than $0.10 USD. Also very popular and cheap for stablecoins.
* Tokens on Polygon (e.g., MATIC): Less than $0.10 USD. Offers low fees as a Layer 2 solution.
* BTC (Bitcoin): Ranges between $1 and $50+ USD. Very variable! Depends on network congestion.
* ETH / ERC-20 Tokens (e.g., PEPE, USDT): Ranges between $0.50 and $10+ USD. Variable with congestion. Can be expensive.
4. Why Do Bitcoin ($BTC) Fees Vary So Much? 🤔
The Bitcoin fee is not a percentage of what you send, but depends on two main factors:
A) The demand for "space" in the block: The Bitcoin network can only process a limited number of transactions per block (which is created approximately every 10 minutes). When there are a lot of people sending BTC (for example, during market euphoria or high volatility), the "space" in the block becomes a precious commodity. 📦
B) Bidding for priority: Users "bid" against each other by offering higher fees for their transactions to be included faster by miners. If demand is high, fees increase to secure your place. If demand drops (as we sometimes see fees of only $0.14 USD), fees drop drastically. 📉
* Conclusion: Be strategic! Check the network congestion (you can use tools like mempool.space) before sending BTC if you want to pay the minimum. ⏱️
5. The Mystery of "Gas": Why can't I move a cryptocurrency if I only have a balance of USDT in my personal wallet? ⛽
This is a very common question and a source of frustration. If you have tokens like PEPE or USDT (ERC-20 version) in your personal wallet (not on an exchange like Binance), and you only have those tokens but no ETH, you will not be able to move them! 🚫
A) The need for "fuel": Each blockchain has a native cryptocurrency that acts as "fuel" to pay the transaction fees (the "gas"). For tokens living on the Ethereum network (like ERC-20), the fuel is $ETH. For BEP20 tokens, it's $BNB. For tokens on Polygon, it's $MATIC.
B) Example of PEPE and ETH: Even if you have a lot of PEPE in your Ethereum wallet, if you do not have a small balance of ETH to cover the gas fee, the transaction will not be sent. It's like having a car full of gasoline (your tokens), but without the key to start it (the gas). 🔑
C) Difference with exchanges: When you withdraw from an exchange like Binance, they usually manage the "gas" for you and charge you the fee directly in the token you withdraw or in the base currency. But if you do it from a personal wallet, gas is your responsibility! 🏦
* Conclusion: If you manage tokens in a personal wallet, always have a small balance of the native cryptocurrency of that network to cover the fees for your future transactions!
6. Vital Tip! Double Check the Destination Network ✅
Whenever you send any crypto (native or tokenized), make sure that the network you select in your exchange is the same as the network that supports your destination wallet! If you send BTCB (BEP20) to a native Bitcoin address, or PEPE (ERC-20) to a BNB Smart Chain address, you will lose your funds! ❌💔
The key to a successful and economical transfer is to understand where your crypto lives, how you send it, and what "fuel" the network operates on!
Share this post to help more people save! 👇 And tell us, what is your favorite network to send stablecoins for its low fees?
