Do cryptocurrency transfers have costs?
All cryptocurrency transfers are subject to so-called transaction fees. In this article, we'll address a few common questions about the fees associated with cryptocurrency transfers.
What are transaction fees?
Transaction fees are costs that the sending party of a cryptocurrency transfer pays for the processing of their transaction in the blockchain.
These fees reward network participants, such as miners, who confirm and process network transactions. Transaction fees ensure that miners have an incentive to maintain the network and confirm transactions.
Miners prioritize transactions with higher transaction fees. Therefore, transactions with higher fees are more likely to be processed more quickly. Setting a too low transaction fee for a transfer may result in the transaction taking several days or weeks to process. The transaction may also be rejected due to the low transaction fee.
How much does transferring cryptocurrencies cost?
In principle, the level of transaction fees is determined by the congestion of the network, i.e., how many transactions are pending on the network of a cryptocurrency at that moment. However, there are differences between different services in how the final cost of a transaction is determined.
Some services allow you to determine the fee for your transaction yourself. By choosing a higher fee, you pay to have your transaction processed more quickly. Choosing a lower fee may require you to wait a bit longer for the transaction to be processed.
At Coinmotion, the fee for transactions is automatically determined, and you cannot influence the amount of the fee yourself. However, you can always check the fee for an individual transaction before confirming it.
It's worth noting that the amount of cryptocurrency being transferred does not affect the size of the transaction fee.
Is there a cost to receiving transactions?
The service that initiates the transaction always bears the transaction fees. Therefore, receiving a transaction, regardless of the cryptocurrency or service, does not cost anything. If someone asks you to pay for receiving a transaction, it may be a scam.
High transaction fees
Because transaction fees vary according to market conditions, fees are sometimes higher than usual. To avoid surprises, it's always a good idea to check the transaction fees before making a transaction.
However, this does not mean that the fees for all cryptocurrencies are high at the same time. If transaction fees are high, you can, if possible, make transactions through a cryptocurrency with lower fees when transferring between services. For example, the transaction fees for litecoin are often a fraction of the transaction fees for bitcoin. Another option is to wait for fees to decrease along with market conditions.
Coinmotion internal transfers
It is possible to send transfers within Coinmotion to other users of the service free of charge. These transfers do not incur transaction fees because the funds remain within our service and do not go through the blockchain.
You can transfer funds to other Coinmotion users using the recipient's Coinmotion account email address as an identifier. You can transfer both euros and cryptocurrencies.