#CryptoFees101 #CryptoFees101 – A Beginner’s Guide to Crypto Transaction Fees

Here's a simple breakdown of the most important things to understand about crypto fees:

🔹 What Are Crypto Fees?

Crypto fees are charges paid when you make transactions on a blockchain. They go to miners (Proof of Work) or validators (Proof of Stake) who help confirm and secure transactions.

🔹 Why Do Fees Exist?

To prevent spam on the network.

To reward miners/validators for processing transactions.

To prioritize transactions during busy times.

🔹 Types of Crypto Fees:

Network Fees (Gas Fees):

Common on Ethereum, Bitcoin, etc.

Paid to miners/validators.

Vary based on network congestion.

Example: Ethereum gas fees spike when the network is busy.

Exchange Fees:

Charged by platforms like Binance, Coinbase, etc.

Includes:

Trading fees (maker/taker)

Deposit/withdrawal fees

Wallet Fees:

Some crypto wallets charge small fees for sending crypto.

Often just cover the network fee, but can include a markup.

🔹 Gas vs. Fees (Simple):

"Gas" = fuel needed to process transactions (mostly used in Ethereum).

"Fee" = the amount paid for the gas.

🔹 How to Reduce Fees:

Use Layer 2 solutions (e.g., Arbitrum, Optimism).

Time your transactions (avoid peak hours).

Use low-fee blockchains (e.g., Solana, Polygon).

Choose fee-friendly exchanges.

🔹 Examples of Fees:

BlockchainAvg. Fee (varies)Bitcoin$1 – $5+Ethereum$2 – $50+ (can spike)Solana< $0.01Polygon< $0.01

Want a cheat sheet or comparison chart for common platforms and their fees? Just ask!