High withdraw fee rates by binance etc, Why?!

[LoyceV]

You can also switch to FTX exchange that doesn't charge any fees for withdrawing Bitcoin

Let's see what they say:

Small BTC withdrawal fees: BTC withdrawals > 0.01 BTC are free. BTC withdrawals < 0.01 BTC are charged withdrawal fees after your first free one per day.

I can't find if there's a minimum withdrawal amount: most exchanges don't allow you to withdraw $10 in on-chain Bitcoin.

[ultrloa]

Hi,
trading websites like binance, do charge user for 0.0005 BTC (half of mili BTC or 0.5 mBTC) when user is going to withdraw.
Many other websites are likely charging users for same fee. What is the reason?
Sites like binance do pay users in groups, I mean they pay to 10 users in same transaction. this will also reduce fee payed by binance.
So why binance (or other sites) do charge user for $10 as fee when they do pay $1-2 as fee?
For example even if binance pay $1 as fee to the bitcoin network, then it will charge user for $10 (0.5mBTC).
I think binance do not likes that users withdraw their BTCs because maybe they do not have enough BTC in their wallets!

Nope that's not it because this is not how they run their business and Binance is earning a lot of money for this as they are the top exchange exist. If I am not wrong that's the default fees even before when bitcoin is so cheap. So if you think the network fee is so high better shift to other alts which have less fee and fast.

[dkbit98]

I can't find if there's a minimum withdrawal amount: most exchanges don't allow you to withdraw $10 in on-chain Bitcoin.

I don't think there are any minimum amount of Bitcoin you can withdraw on FTX, but you need to be careful to choose Bitcoin main chain, not fake bitcoin on bsc or sol chains.
Sending anything to wrong chain will cost you minimum 5% to return it back if you make some mistake, so better be careful newbies.
Last time I tested I am sure I tested with minimal amount of coins with value below $10 and it worked fine.
Note that FTX is changing this terms ofn every few weeks so better verify this yoursefl, instead of trusting my words.
I would pay attention on

[epsi1on]

For conclusion, and from posts in the topic, I can say that "Withdrawal Fee" is something different than "Network fee".
The withdrawal fee is invented by brokers (and taken by brokers), while network fee is basic feature of bitcoin, and is taken by miners.

Withdrawal fee is somewhere from 1x to 25x times of network fee. (network fee much cheaper)...
So brokers take withdrawal fee from users, say it is $20, pay 5% of it ($1) as network fee, keep rest 95% ($18) for themselves...

[o_e_l_e_o]

So brokers take withdrawal fee from users, say it is $20, pay 5% of it ($1) as network fee, keep rest 95% ($18) for themselves...

You've got it now, but bear in mind the network fee they pay is hugely overpaid as well. The vast majority of bitcoin transaction I have ever made I have paid a rate of somewhere around 1-2 sats/vbyte, which works out (at current prices) of around 10 cents. With large batched transactions, as is the case with withdrawals from centralized exchanges, then the relative size of your individual output is even less, meaning that your part of the transaction would cost less than 5 cents if you had control over signing and broadcast. But instead of paying 5 cents they charge you 20 bucks, overpay the network fee, and then pocket the rest.

I still have never managed to figure out why people seem to be OK with this. Why use an exchange which charges you 20 bucks to access your "own" money when they could do it for 5 cents? Why do Binance users put up with this highway robbery?

[epsi1on]

I still have never managed to figure out why people seem to be OK with this. Why use an exchange which charges you 20 bucks to access your "own" money when they could do it for 5 cents? Why do Binance users put up with this highway robbery?

I think having bitcoin is somehow complex for even average users, I mean those users who do not even install an antivirus on their laptops. And CEX like Binance did identify this demand, and filled the gap!

Also, nowadays many users just need bitcoin for trading and investing, not for anything else...
Those for trading will use brokers like Binance, those for investing will use cold wallets like ledger! from people in my circle I can say only 1 of 5 (20%), are using something other than CEX sites, for keeping their crypto...

I think bitcoin is not designed for being popular, it is designed to be decentralized, so there is room for such 3rd sites...

I think most Binance users, just heard (once) about the fundamental stuff of bitcoin like signing, hash, distributed ledger, block chain etc.
Remembering I was talking to a friend, ask him do you know about technical stuff of bitcoin? he said yes. I should look at news, and identify when is time to sell and when is time to buy!

[o_e_l_e_o]

And CEX like Binance did identify this demand, and filled the gap!

CEXs might fill the demand, but there are many CEXs other than Binance which do not rip off their users to such a ridiculous degree.

are using something other than CEX sites, for keeping their crypto...

If they are using a centralized exchange to store crypto, then they don't actually own any crypto. They own an IOU at best, which can be taken away at any time and for any reason.

Remembering I was talking to a friend, ask him do you know about technical stuff of bitcoin?

You don't need to understand the technical side of bitcoin to appreciate having sole and uncensorable control over your own money.

[The Cryptovator]

Exchange charges are high because it's their business. They are taking care of your funds and accounts. You know it's a withdrawal fee, not a transaction fee. They are holding funds on your behalf of you. Though they are making revenue from trading fees, withdrawal fee is more high revenue for them. It's because we are forced to pay if in case deposit there. So don't use CEX unless you want to trade. Use a non-custodial wallet to handle your funds, so you don't need to spend extra for transferring funds.