Why are crypto transaction fees so high

[butterscotch lover]

Hello guys I recently was buying some btc through coinsquare as well as using paypal. The amount of deductions transferring in wallets starting ranking up a lot. I'm wondering why this is the case? Fiat currencies feel like they have less transaction fees.

[Pmalek]

The mempool is currently quite full and that always affect the transaction fees which tend to go up.
You can check the current state of the mempool here > https://jochen-hoenicke.de/queue/#1,8h

The thing with Bitcoin is that you have the freedom to select your own transaction fees, depending on what kind of wallet you are using. Don't use fees as suggested by your wallet software, they are mostly too high. If you are not in a hurry and don't need a quick confirmation you can set minimum fees and have the transaction confirmed within hours or even 1-2 days.

The weekend is near and that is when the mempool usually empties and you can use minimal fees and still get quick confirmations. 

[actmyname]

It may seem quite high, but do be aware of the logistics of how a digital network for financial assets would work. In a decentralized setting, there needs to be a cost associated with the transfer and verification of information. Thus, it is packaged and stored and has a respective size associated with it - those would be the various input transactions that give your wallet its balance. What is interesting, though, is that the size does not necessarily reflect the value of the transaction: there may be some wallets that send out transactions with only one input transaction, but its value could be anything from 0.001 BTC to tens of thousands of BTC.

So, then, let's think about what situation would make it such that the market forces have created very high fees: a high demand in transactions. The mempool that Pmalek referred to is just that: the pool of which broadcasted transactions are taken from. Then, miners (assuming rationality and maximization of BTC) would mine the transactions starting from the ones with the highest fees. What is happening when the fees that your client/service charges per transaction increases? The global demand for output transactions is high, and has been high for some time!

[OgNasty]

Crypto transaction fees are so high because they are worth it.  

The same reason it costs more to order a hamburger at TGI Friday's than McDonald's.

[butterscotch lover]

Thank you for your in-depth explanations Pmalek and actmyname, especially the link you provided. I was not aware how transaction fees were determined.

Crypto transaction fees are so high because they are worth it. 

The same reason it costs more to order a hamburger at TGI Friday's than McDonald's.

Quite the useful post you have here mate. I didn't know legendary members have such useless posts. I guess I post at the same level as a legendary member

[Lordhermes]

The mempool is currently quite full and that always affect the transaction fees which tend to go up.
You can check the current state of the mempool here > https://jochen-hoenicke.de/queue/#1,8h

This my first time hearing about mempool, I haven't come across this before and rather understand what this really means, here is a forum of learning, I'm learning everyday acquiring new knowledge. Thank you so much Boss.

Hello guys I recently was buying some btc through coinsquare as well as using paypal. The amount of deductions transferring in wallets starting ranking up a lot. I'm wondering why this is the case? Fiat currencies feel like they have less transaction fees.

Most things about Bitcoin rather cryptocurrencies is that, you can minimise your transaction fees depending on the wallet you operating on, the lower the fee the slower the transaction, depending on your schedule of the day. Transacting Bitcoin between fiat in PayPal attracts high charge and I don't think there is an option to minimize your fee in PayPal.

[mk4]

While bitcoin transaction fees can definitely be expensive at times especially when the mempool[1] is quite congested, you mostly don't really need to pay high fees unless you want to get the transaction confirmed in no time. Based on what you said though, it looks like you're referring to withdrawal fees specifically, and withdrawal fees from exchanges are mostly unnecessarily high.

[1] https://www.blockchain.com/charts/mempool-size

[gentlemand]

The amount of deductions transferring in wallets starting ranking up a lot. I'm wondering why this is the case? Fiat currencies feel like they have less transaction fees.

This is little to do with official cryptocurrency network fees, though they can certainly get high, this is what the company you're using chooses to charge you.

https://help.coinsquare.com/hc/en-us/articles/360004303171-Digital-Currency-Withdrawal-Minimums-and-Fees

At the moment that's about $4.50 for a Bitcoin withdrawal which is waaay above the proper network fee at the moment and that proper fee has only gotten that high a handful of times. Coinsquare may say it's been bumped up that much to make sure withdrawals go through no matter how congested the network is. I'll bet it's also a handy extra income stream as it hardly ever has gotten that bad.

Either group your withdrawals so you only pay that once every so often or find somewhere else. If I were buying small and often I wouldn't tolerate that high a fee.

[QueenVera]

Was about asking same questions as I used my electrum wallet recently to execute a transaction when I inputed the fess to confirm in approximately 10 blocks it gave me a warning that my fees was too high for the amount I was about sending.
I did reduced the fees to confirm in approximately 25 blocks but my wallet also gave me a warning that the fees was too high. That fee was the lowest my wallet provided which made me to spent nearly $1.5 in processing a transaction under $10. That was just too high but I guess that's the scarifies we have to offer in supporting a technology still developing.

[Sanitough]

How high it is? can you please put a specific amount or a range of amount?

Transaction fee in blockchain or the other platform? if you are referring in blockchain transaction fee, I think it's not high if you are transferring a decent amount but if you are doing it with a small amount you would really feel the fee. Actually you can make set a small fee but transactions will not be confirmed easily, higher fees means faster confirmation while lower fees are does the opposite.

In using another platform in purchasing bitcoin, of course there's always a fee as that is their primary income, example in our local exchange the buy/sell rate is always not at par by the standard rate of the market, so they make income with that.

[Lucius]

butterscotch lover, another newbie has similar questions as you, and if you read the answers in that topic I believe some things will be much clearer to you. Once you understand how things work, you will certainly be able to save a considerable amount on fees. For start (if you haven't already) try using a service that supports SegWit (bc1 or 3 type address), and crypto exchanges that have a lower withdraw fee.

high fees to send with electrum wallet (compared to on coinbase)

[l3pox]

you can always use an altcoin as alternative to save transfer and withdraw fees (on exchanges)
in the end for sending money between countris crypto is still a great option and much cheaper than traditional banks or exchanges.

[gentlemand]

you can always use an altcoin as alternative to save transfer and withdraw fees (on exchanges)

You need to do your sums with that if you want to end up with the original coin. By the time you've added up trading fees and the potential price difference between places you're more than likely to have thrown away more money than you thought you were saving.

[RapTarX]

Fiat currency fee is constant while depending on number of tx happening on bitcoin network, fee can increase or decrease. You know there's a limitation of 4 MegaByte (virtual) of block which is why there are some pending tx which compete to be included in the block, hence, sometimes people have to pay higher fee.
I never saw anyone to complain against fiat fee when bitcoin fee is low.