Bitcoin Forum

The crypto industry has yet to evolve from exchanges which are nothing more than digital banks in reality. A couple are taking bold moves to slash their fees but how many others will follow and how will it affect the wider crypto industry.

https://bitcoinist.com/why-crypto-exchanges-should-drop-their-fees-and-profit-margins/

The article is telling about the zero fees which was done by Poloniex. But thinking of the consequences if exchanges will allow this to happen, I only see a very small chance that it can. They may implement zero fees but they have to look for elsewhere to continue supporting their costs of operation.

There's already a network fee as stated but it shouldn't be told on the article like that because the exchange isn't the one that confirms the network. But it will be great if we finally see some other known exchanges do this.

Lower fees =/= happier users

Not necessarily true. There are a lot of factors that go into making a cryptocurrency exchange successful such as branding, marketing, the # of trading pairs, the user interface, accessibility, verification and the country they are located in.

Every exchange is different so it is tough to say when or if they will lower their fees.

My suggestion is to do some research on what exchanges are out there (including their fees) and choose the best one for you.    :D

Not going to happen to other exchanges. They need another source to in order to provide profit that the trading fee has. Also, greed will always take them. As long as people are content with the fees, they will still have it since having zero fees doesn't really mean that more users will use it and they will have more profit that way.

I traded HUOBI pretty hard when it was still possible for me.. It was a zero fee exchange..

I absolutely friggen loved it!!! Zero fees is awesome for a trader like me (daytrader with tons of trades)!!

They made their money on margin positions and WDs instead of regular trades.. It was great!

I wish their was a BTC/fiat exchange like that I could trade again!

And, I even think the volume was real, because I could trade all day with small hits or misses putting down huge volume for my size and still WIN..

We already have a flood of cryptocurrency exchanges, and yet we don't see massive shift towards minimal fees or even zero fees. Many of these outfits are for making good profits, first and foremost, and so they must be charging the fees or to implement creative ways to make money otherwise they might not grow as big as they want to be. We already know how big exchanges can be so profitable like Binance is doing right now. I am hoping that eventually competition can be taking a tool on charges and many can be lowering whatever they are getting for trades and for withdrawing the assets from their platforms. Some are really charging exorbitant fees and its is time maybe that we users should sound this message to them.

it will all come down to competition.

so far, there isn't that much competition going on, those exchanges that are trying to offer lower fees or even zero fees don't  count because they are are currently so desperate for volume to just stay afloat and not die!
and the big ones that do count which are getting huge volumes like Coinbase for example, already have their large number of customer (and growing) and are not afraid of losing them so they don't feel they need to compete with anything.
if this situation were to change and more big exchanges were to be created then the fees would automatically reduce, supports and services become better and a lot more!

The evolution of crypto exchanges should be more focused on the shift from the centralized exchanges that we abundantly have right now into decentralized exchanges. A peer-to-peer exchange platform would definitely reduce the charges and fees that are imposed by the centralized exchanges. And not only that; it will also strengthen the promotion of peer-to-peer trading which is what Bitcoin or crypto should be all about in the first place.

There are a number of new exchanges that are marketing very low to zero trading fees, minimum withdrawal fees, narrower spreads, and so forth but these are mostly young and unknown platforms. We are expecting more of this reduction from the big players.

https://poloniex.com/fees/
poloniex still prioritizes promotional objectives until the end of the year, they also cannot be used as a benchmark. if they really intend to be serious, the same promotion must also be conducted for poloniDEX. In general, we all think a lot of things have changed, but their services have proven popular, even users don't always see the fees set, in the end the business must still benefit the owner.

There are many exchanges in the cryptocurrency market and each one has a different strategy to attract traders. Reducing exchange fees and withdrawal fees is also a very good tactic to attract traders to use the exchange. However, all exchanges are for-profit, so they will definitely not be able to reduce transaction fees too low.
Personally, when choosing a transaction to use I am more concerned with the reputation of the transaction than the exchange fee. Because if I was hacked to lose all my assets, then what does the transaction fee mean?

About fees, there will always pro and contra about it. I think for now exchange's fee still not be a problem. If they are a big problem, maybe a lot of traders wouldn't trade in exchanges. And they are not open for social work, i mean they need operational cost so, i think as long traders still use it, not need to be worry about exchange fees. If me, as long the exchanges really do their work, like security or maybe good services, fees in trading and withdrawal i will follow it.

Bitcointoyou it is a cryptocurrency exchange created at 2010 and now have more then 350 thousand users.

It is not charging fees to trade BTC, LTC, ETH, USDT, USDC

We don't believe is heatlhy to an exchange to not charge fees to all pairs/cryptos. So we charge to do FIAT withdrawn and pair BTC/BRLC

as long as these costs are incurred and the exchange provides good services, I am also willing to pay. so in my view it is not much different, when they provide good service then they pay workers there to provide services for us, and therefore costs are needed.

Polo deleted my friend's account, they don't have any notifications. He tried to contact support but just received silence. At the present time the email that he uses to register for the polo exchange can create a new account.
Therefore, transaction fees are not as important as reputation. Even when the polo brings the transaction and withdrawal fees to zero I never use the polo exchange, it's too dangerous for my assets.

The article criticises Coinbase and praises Poloniex for having zero fees.

The only problem with this: Coinbase is a solid exchange and Poloniex is crap.

The move from Poloniex to have zero fees is similar to what Cryptsy did before they did a runner. Zero trading fees (to encourage volume) and high withdrawal fees (to discourage withdrawals and make a profit from those who do take their money out).

It's not a good sign. You should always ask yourself how these exchanges make profits. Some are upfront by charging fees. Others are dodgier and are using your coins to trade while trying to discourage you from withdrawing.

What people in this crypto space need to understand is that crypto exchange platforms provide services and people are expected to pay for them services they provide them. In as much that some platforms provide lesser fees than others does not really guarantee that they all provide similar services. There is no way most crypto exchange platforms will agree on the fact that they should lower their fees and profit margins. No one will provide services without having the mind of making profits.

There won't be zero fees at any exchange, let's be realistic. To bear expenses like maintaining infrastructure, employee pays and cyber defense exchanges need money. The only thing we can suggest about the fee is that it should be under some limit. Reasonable the fee, happier will be the client and this will attract more business to exchange.

That's why I HODL. No trading means no exchange fee. Exchange fee trouble those who do the day or very frequent trading. The exchange fee is not only a matter of concern in crypto but in equity, forex and commodity also. In my opinion, nothing can be done against them as long as day traders are willing to do so many transactions per day.

I think that you can find other ways to monetize, in addition to fees. Fees must remain in the past.

Reducing fees is definitely necessary, but to understand how much you can reduce, so as not to harm, you need to do it gradually.

What other ways?

Exchanges have four methods of monetisation:

1. fees applied to trades

2. fees applied to withdrawals

3. profits made from using members coins and lending them out. This is super risky

4. the exchange using members coins to trade for themselves. This is also risky - if the exchange loses, that's the members coins gone.

Fees applied to trades is the least risky option.

I would definitely support this thought as the exchanges are taking heavy fees on some coins in the name of 'Network fee'. There are lots of allegations that exchanges take heavy fee on listing also. Exchanges are the gateway for common people to start investing into crypto so they have to think about this.

The article mainly covers Coinbase and related exchange that has insanely higher fees. The only reason for people using them are the bank integrations.
For a better trading environment, traders should bypass the high fees exchange in favor of low ones and use them as little as possilbe if you really have to. For example buy a coin with fiat and withdraw immediately to another exchange for trading rather than trading on the higher fee exchange. The cost for you might be the same and maybe a larger hassle but that would be a message for the exchange.

Perhaps Poloniex is thus trying to get out of the bottom. The exchange has long been not popular because of its problems, which began when Circle bought this exchange. I think it is absolutely not profitable for any exchange to make a zero fee and this is an isolated case

These fees imposed by the exchange platform on traders like the fuel that drives the machine, without this fuel the machine will not run, the machine here is the exchange platform and the fees differ from one platform to another, according to the services provided by each platform to its traders, and according to the features and developments of each platform, It will be good when platform fees are reduced, but will they continue to provide the best level of security for traders and the services they provide?

I think it's kinda impossible for crypto exchanges to lower their fees because that's how they're getting profit, I hope that's gonna happen in the future but it's so hard to be realized. I just didn't get higher fees for withdrawals on Yobit. I used this exchange platform and the withdraws fees for bitcoin is around 0.0012 btc which it's so high as well as fees for dogecoin are high compared to other crypto exchanges like Poloneix (which it's has 0.0005 btc fees for bitcoin withdrawals)

Honestly, for me trading fees are not too much of a problem if they are justified by good and fast service. I do not like paying more than $5 for withdrawing in fact I would prefer to pay only $1-$2 to withdraw bitcoins so that is a factor for me. My choice of where to exchange is between the coins they offer and the withdraw fee basically. Next I look at the fees and if they justified and the first two points are met then I will use the exchange. Obviously only after reading about other users experiences using it and doing a few tests withdraws and deposits. Then I will return and be loyal to that exchange since I feel there is no need to change to another one of everything works well and the fees are fair.

In order for each trader to be able to reduce commissions and other percentages for their activities on the cryptocurrency exchange, for this exchange create their own token, thanks to which the trader can receive significant bonuses.  But if you look a little into the future, I believe that the commissions will increase by a few percent In any case, especially if the cryptocurrency is legalized And if the state requires tax payment on each transaction, as well as when exchanging cryptocurrency for Fiat.  All responsibility, of course, lies with cryptocurrency exchanges, but in connection with this, exchanges will charge interest with a high coefficient on their users.

It is easy to believe that if an exchange does not have any fees when it comes to your trades then this is good for traders, but this generates a problem, bots could be used in an exchange to try to create fake volume and make it seem as if it is very active when it is not, we already have problems to be able to tell what it is the real volume in this market and such a move by the biggest exchanges will only make the problem even bigger so I'm against it.

There should be fees for the services they provide and exchanges are like middlemen to facilitate trader's transactions from those sellers and buyers. So, logically, we are talking here about the business that they make revenue and continue their services. Just like Binance, they are one of the lowest fees and at the same time a large volume of traders. So, possible they had a lot of staff to pay and all the cost was made on the exchange revenue. Nevertheless, there are few exchange sites that don't have fees but when transferring your crypto asset but it should be the same site, for example, Cobinhood, it should the same company.

I do not think that something can be expected from other exchanges after one exchange has reduced a fee. This is absolutely unprofitable because this is the main earnings of the exchanges is a fee, a decrease of a fee to zero will greatly reduce income

If they does not reduce the fees for teh traders obviously the people who give the lesser fee than them will be capture the trading volume on their platform.
We just need focus on the good exchange also at the same time because the users are looking for good exchange first and then they want to have the fee also as a matter of it.

The reputation of the exchange, reliability, honesty are more important to me even if the fee is high. It will pay off because otherwise, an exchange with a low fee may turn out to be a scam or have weak protection and I will lose everything

It's better they slash their fees because it's ridiculous for big names in the crypto space to charge high fees while the small ones are trying to get to the top. They all had low only to get to the top just to increase their fees. Theee are better exchanges with lower fees with great UI if the big exchanges refuse to reduce their fees.

Exchanges are like digital banks? This is where you are wrong. No way exchanges can be compared with banks. You can say people use it as "digital banks" which is in fact the most irresponsible thing a person can do. Exchanges should never be used as a place to store your coins. Exchanges are prone to hacks no matter how secure they claim they are. Remember, nothing in this world is 100% perfect or secure. Everything has flaws.
They will eventually reduce fees and profit margins as more competition arises. But do know that, even exchanges has to earn money, so don't be expecting extremely reduced fee from them.

I see an even smaller chance, as in *zero*.

How do you think exchanges make their money?  Plus I don't understand how anyone could possibly complain about trading fees on crypto exchanges, because they're all very low to begin with.  If you had to complain about anything, it should be withdrawal fees.  Those are usually much higher than what it costs an exchange to actually send your withdrawal out.

Yes, in a perfect world it would be lovely if exchanges didn't charge anything to trade, but we don't live in a fantasy land like that.

Crypto exchange, which has this principle, I think has spread a lot since last year, and up to this point it has no significant impact even on their own projects. Low fees are just a caption to lure investors and eventually they will keep giving normal fees so the project can continue.

Its really part of the business to earn from charge fees. Of course there are operating expenses to attend to. But of course fees should be standardize so not to abuse the users. The more competitions arising and many exchanging sites to choose from. I guess these exchanges also had their own strategies to attract customers to use there platform. And most likely customers look on the lowest charge fees.

Operating a good exchange site comes with a price. I know that lower fees attracts a lot of new traders to sign up however, if you think about it, where are they going to take or get the money to continue with operations? Lets not give them the reason to scam us, but instead lets give them more reasons to give us the best service there is. Im ok with fees as long as they give good client experience and good customer service, fees will never be an issue.

I think what they aim when some exchanges impose higher fees on lower volume trades is that they force such traders to go higher. In the business sector, you could see that whenever you buy huge, the prices become lower. Such as when you buy items in wholesale/bulk, you get discounts and lower item price than when you buy in smaller amounts. Same principle is applied to their exchange.

Part of the article that I find interesting is I hope they can continue to do and make it a permanent feature of the exchange, but I have doubt if those industry leaders in exchange will follow suit, because the hacking is a huge issue, and they are securing traders funds in case of a breach.

I think the exchanges will adjust their fees with the bitcoin price, and the exchanges will apply reasonable fees for the traders, so traders will not think that the fee is too high. If we check on the fee, poloniex, bittrex, and binance have a low fee, and if we can make a profit bigger than the fee (which I am sure that we can make that profit), then we don't have to think that the fee is too high. If we don't want to pay the fee in bitcoin, we can use the other coin, which is not too high as bitcoin. There is always a way to get a solution to reduce the fee from exchanges, so we still get the money to receive in our wallet.

not all of them and you can find some that has less fee and legit,just don't use those Big exchange that very confident that they will never lose users even if they charge larger fees,but soon for sure competition will take place as this is an issue for long time and people nbow are getting smarter

This is so true and thanks for bringing the community's attention to this. Most exchanges charge very high prices when it comes to their trading fees and withdrawal fees. What really annoys me is that they charge us individual fees yet send the funds in bulk to save themselves some money out of the fees that was charged on users. Binance exchange is one of the exchanges that charge very high. It's great to see Polonex on this path, i knowexmarkets (https://exmarkets.com/)  is also an exchange that charges no withdrawal fees.

Only when the network of exchanges is sufficiently developed, and the cryptocurrency is very widely used by the population of the earth and the competition between exchanges is high, then we can have low commission fees. If commission fees are free, then exchanges will have to receive their percentage of our profits for something else. Exchanges will not work completely free. These are commercial structures and they will exist only when they will profit from their work.

It is impossible to follow that zero fees. How can they actually earn and gain if they will not incorporate fees? Though I am in favor of lowering the fees but not to the extent that they will give zero fees. But, looking at this:


If poloniex made it and will continue, I do hope some virtual currency exchanges may capable of if not in zero fees, then reducing the fees. For some reason, when it comes to that matter (fees) I do understant how their business works.

unfortunately even if there's a competiton people will still choose a more reliable and popular exchange over the one with cheaper fee anytime. majority of people that didn't do daily trading and cashing out fewer than once a week don't even care about the existence of these fees. However, I'm in favor of reducing the fee aswell though I'm not really bothered with the current trading fees.

Yes, and exchanges need a lot of money to maintain their site from all aspects. In my country, there are several exchanges that already closed only because they lack of funds. I know it because i ask my friend who work as staff. They must pay this, pay that, pay employee, anything. Maybe yes, they are new exchanges, but old exchanges will need more money too to maintain their site so people comfort to trade in their site.

Hope you are aware that the top bitcoin exchanges earn a healthy profit, Binance reportedly earned around a billion dollars in profit last year which is around the same profit earned by some top stock exchanges and you think that they are not benefiting from the services, which industry can claim a billion dollar profit in a fiscal year, so the expense you are talking just pale in comparison when you look at the profit they earn and hence they can reduce the withdrawal fees as some are charging a higher charges for that and that should be avoided.

I think they will reduce fee only because of competition and the emergence of new exchanges which may give 0% fee in the beginning to advertise their exchanges. The only advantages old exchanges have is that they are trusted and have a lot of volume. They know people will not try out the new exchanges and therefore they charge any amount of fee which is just a burden on the customers.

It is true. I do not mind that, if the fee is comparable to the quality offered by the exchange, including the security and speed of the transaction, that makes me comfortable doing the exchange. After all, we give the fee for using the exchange service, nothing is really free right in this world? so this is a symbiosis of mutualism. And the most important thing here is the excellent service provided by the exchange, with a good system support, responsive to any obstacles, that's what I need the most. After all, we can choose the exchange we want, moreover, the fees are dynamic, so we can choose which is the most effective. I still prefer high fees but good service, rather than free fees but it takes hours to complete each transaction.

I usually do avoid exchanges with high fee, but look at this: If you have less traders with low fee, then they may not last  much in the business. Centralized exchanges are very expensive to maintain, they need to be on the latest technology to meet up with security, except they have large volume of trades. But I hate exchange with high fees like LUNO is super expensive in my country.

There are many exchanges mostly a new exchange that are trying this method to gather as much user as they can but also still failed. It's not just because the fee is cheap people will just switch exchange there are too many factors that need to be considered before switching exchange and the legitimacy of the exchange itself and the proof that they are licensed under the government is one of them. This method of reducing fee to attract customer is not the most efficient method.

Zero fees? Nah I don't really see that happening. Maybe exchanges will agree to cut their fees by, let's say, half, but to make it a zero fees? That's not going to happen. What you have to know is that these fees are like a source of income for exchanges and they need the money to be able to continue their operation. If they stop the fees and start charging zero for their services, then I wonder where they will get the money to pay their workers and maintain their sites, pay engineers and all that. So they are not going to agree with such an idea.

But the truth is that, whatever you're looking for here , you will always find it. If you need zero fees, since poloniex is offering that, then you should go for it and leave other exchanges. Or if it need fees that is moderate, with better services and security, then there are also those that offer that.

It's a free market.

If you find an exchange that has their fees dropped. Use it. It will incentivize other companies to do the same.

I fully agree with that. Every cryptocurrency exchange need to be profitable for its founder. But I'm really grateful that some crypto exchanges give a lot of various opportunities for their users which lower fees. Like for example CoinDeal where having some CDL Tokens could lower your fees, this is huge superiority for users in my opinion.

Basically, the fees mostly are depending on the rate they've provided no matter how much is the amount that the trader wants to trade. In this case, you can barely see the loss if you are trading a little amount of money rather that utilizing a huge amount of funds, wherein the transaction fees seems to be smaller. In the end, these exchanges still earns allot from traders and I think if we don't want their system, there is allot of exchanges available for us to choose from.

And the owner of that exchange know how much will be enough fee for them to earn and attractive to users to get more traders.

There are exchnage with low fee bur the questions is if the volume of exchange is enough and how secure that exchange is.

I hate to say this but I have to; it is not about all about splashing the fees.
Though I am a big advocate for lower transactions fee in exchange trading and all that but it's a pity that most exchange with lower fee has the worst service; they most likely use lower TX fee to attract customers. So as a user, you will come to realise that you need a good service after all more than lower fee.

Why would the volume matter? It has nothing to do with trading or withdraw fees. You don't need high volume to trade on an exchange. That's not how it works. You only need volume when its the entire market. A small exchange can do well with a low volume of they give good customer care and run smoothly.

I think that the profit margin might already be quite low for a new exchange. The need for employees grows while profits might never do. Many new small exchanges rely on listing bitcoins to earn profits but this is only a task with diminishing returns as the volumes dry up very soon. Many crypto exchanges in fact close down within their first year of operation... It's easier to open an exchange now with the white label solutions, but to make it innovative and capture insterest is still hard.

there are some exchange that closes earlier because they entered scamming jobs ,or they are just created for a certain projects to mislead people and victimized investors.
we have seen many of this in the past ,you can find an exchange exclusively operated for a certain ico token and after short time they will vanish together with the developer.so how can they be trusted?
we need lower fees from exchange to attract users but in the end?its their reputation that will let them stay longer.

What they can do to suffice this is to actually avoid hiring many support and limit their team based on the salary that they have available to offer. As well as choosing the best employees to do the job because a new emerging exchange should possess the characteristic of being efficient in their services and operation. Or else, if they miscalculated, then they will end up closing and stopping their operation without any profits. Because for us traders, what we want are exchanges that offer less transaction fees.

towards the end of the year many exchanges do that, also happens to exchanges in my country that offer zero fees for USDT transactions (5% reduced to 0%), everyone also understands if it's just a temporary marketing strategy.

There are no significant changes that apply permanently, the business side is still emphasized by increasing the attractiveness of services and periodic events, there is no significant difference and remains the same as digital banks.

Yes good support is way better if they can assist us in everything that we are doing in their exchanges. If there are issues that happened and if there are problems need to resolve fast and easily. This will make us realise that those fees are worth paying as they do their job rightfully.

I dont know. Fees trading are not that large, unless you trade alot all the time.

Withdrawal fees can be alot, to withdraw small amounts ... This should change.

that is pretty much makes sense.

could not agree more with you. there is a lot of problem with poloniex such as freezing user's account without valid reasons , a sudden maintenance, extremely poor support and manymore! that is why they have zero fee as they lack of professionalsm .
better to have some fee in an exchange but gives you a security rather than zero fee but you will feel insecure the whole time.

there is money , there is quality. don't blame if you get charged as it is for providing a better service , that's all.

In my life I find many people that seem to have lost connection with the way the world works, the owners of those exchanges do not offer their platforms just because they want to help the spread of cryptocurrencies around the world, it is a business and like any other business they need to make money and in the case of exchanges the main way they have to earn money is by charging fees, and if you compare the fees that you're charged for each trade and you compare those fees to the stock market you'll find that the fees that we are paying are very low.

Would prefer on this way and definitely choose it up rather than risking on using a service which you've known that have already some issues in the past upto present.
Going back to the days where Poloniex is one of the top exchangers but suddenly they ranked down when Circle decide to buy it and get involved into account blocking and
other service related which in result to that outcome.Now they're offering 0% fees? I highly doubt that this one wont buy out.

Spot on.

Also, good security on the exchanges costs money. It's no good demanding low fees, and then wailing when the exchange gets hacked and coins are lost, because they weren't making enough money to invest in hacker-proof security.