#CryptoFees0101

Crypto fees and commissions: what are they and what are they for?

We help you understand the variable costs of operating with cryptocurrencies, which depend not only on each blockchain network but also on the dapps we use.

"Ethereum gas is very high"... "Operating on Solana is cheaper for me"... "I only play play-to-earn on the Binance Smart Chain because of the commissions". If you've been around the crypto ecosystem for a while, you probably hear these kinds of phrases quite often.

Commissions are amounts paid when operating with cryptocurrencies (and with other types of blockchain tools, such as NFTs), and they are a daily matter for anyone dedicated to trading, or for those who are constantly trying to optimize their token and cryptocurrency portfolios.

These amounts represent a payment for using a network or a crypto tool based on blockchain, and are generally allocated for its maintenance: in some cases, they cover the mining costs of operations and in others, they represent a payment for the services offered by a platform, for example, an exchange.

Where the price of a commission comes from

Keep in mind that these commissions serve to regulate two aspects of the crypto ecosystem. On one hand, having a cost to "do things" on blockchain networks keeps the environment more refined and serious. And, on the other hand, it finances a transparent system of validation and recording of operations, known as mining. However, each blockchain network chooses its protocol and mining system, and each has its own characteristics, from transaction delays and the number of security confirmations to the hardware needed to mine each network. Certain protocols are more expensive than others. On the other hand, when the blockchain is not used directly but rather some tool designed on top of it, exchanges and decentralized applications (dapps) can charge an additional commission for using their platform, regardless of the fee charged by the network.