Questions about transaction fees

[Oshosondy]

I have some questions I wish you people to answer me, please do not see this as annoying. It is what I have been noticing when I have been using my wallet, exchanges and decentralized exchanges.

It is about bitcoin transaction fees on wallets and exchanges. On my wallet, the highest transaction fee I have noticed before was around 0.0006 btc but I can still set the fee to normal or low to 0.0003 btc and the transaction will be very fast. The transaction time will be very fast like on exchanges. I can be able to set the transactions fee also which may cause little delay, I remember when I set the fee to 0.00005 btc and I conformation within 2 hours. Unlike the exchange I am using, I can not edit the transaction, the transaction fee is also too high, 0.0015 btc  bitcoin per transaction, it is much too high.

1. Why are transaction fees on exchanges higher than transaction fees on wallets?
2. Is there any exchanges I can edit my transaction fee? If not, why are exchanges not having edit fee?

3. About exchanges, I noticed decentralized exchanges trading fees are higher than trading fees on centralized exchange. Do anyone know the reason? Or it is just way both exchanges type want to operate?

Thank you very much. I will like you responses.

[1715129351]

1715129351

[1715129351]

1715129351

[1715129351]

1715129351

[pooya87]

before i answer anything, transaction fees should be analyzed and set based on transaction size and using the amount/size units such as satoshi/virtualBytes (eg. 2 sat/vbyte) and never based on raw amounts (eg. 0.00005 btc) because the later doesn't tell you anything and it could be high for one size and very low for the other.

1. Why are transaction fees on exchanges higher than transaction fees on wallets?

exchanges are offering you a service and are getting paid for it. sometimes the withdrawal fees reflect that too, so they charge you a little more. part of it is also because they over pay the transaction fees so that they transaction is guaranteed to have high priority.

2. Is there any exchanges I can edit my transaction fee? If not, why are exchanges not having edit fee?

i think there are some exchanges that give you some flexible options like "fast and high fee" or "slower/batched and lower fee".

3. About exchanges, I noticed decentralized exchanges trading fees are higher than trading fees on centralized exchange. Do anyone know the reason? Or it is just way both exchanges type want to operate?

true decentralized exchanges shouldn't charge any fees and you should only be paying transaction fees as you would for any other normal transaction. some of them charge additional fees and distance a little bit from being truly decentralized but i haven't seen any that is that much higher than what CEXes charge.

[Little Mouse]

Everything has been cleared above. I would like to add and suggest you the following-
Fees depends on which type of wallet you are using. In case of custodial wallet, fees depend on the service provider (Coinbase for example) and in case of non custodial wallet, fees depend on you (blockchain.com wallet).
I would like to recommend you using Electrum wallet. If you use such wallet for couple of days and complete couple of transactions, you will easily know everything about the transaction fee.

[Oshosondy]

true decentralized exchanges shouldn't charge any fees and you should only be paying transaction fees as you would for any other normal transaction. some of them charge additional fees and distance a little bit from being truly decentralized but i haven't seen any that is that much higher than what CEXes charge.

If I am only paying for transaction fee? that means the fees are only for miners, this is true because I noticed the fee to be paid are always fluctuating, if I want to make a trade of $100, there will be time I will be charged $3 but later I can be charged $2, the trading fee is not constant at all, which means the fee is due to network congested, if the mempool is not congested, the fee will be low. But, on centralized exchange, the fee for $100 is only 0.2% on the exchange i am using which is $0.2, it is not fluctuating but constant. I have gotten answers to the questions already.

[UserU]

If I am only paying for transaction fee? that means the fees are only for miners, this is true because I noticed the fee to be paid are always fluctuating, if I want to make a trade of $100, there will be time I will be charged $3 but later I can be charged $2, the trading fee is not constant at all, which means the fee is due to network congested, if the mempool is not congested, the fee will be low. But, on centralized exchange, the fee for $100 is only 2% on the exchnage i am using which is $0.2, it is not fluctuating but constant. I have gotten answers to the questions already.

Centralized exchanges also charge the maker and taker fees (when you sell and buy on their platform), not just deposit/ withdraw or both.

[mindrust]

1. Why are transaction fees on exchanges higher than transaction fees on wallets?

Exchanges are private companies. They can charge you with fees even when it is a lot cheaper to move your coins on-chain, because they can. If everybody uses a fee-free alternative, then they wouldn't charge you. The exchange I use right now has no withdrawal fees on any crypto. (btcturk)

2. Is there any exchanges I can edit my transaction fee? If not, why are exchanges not having edit fee?

Even if there is any, I wouldn't recommend you to use an exchange just because their withdrawal fees are low. There might be other stuff you'll dislike probably. DYOR.

3. About exchanges, I noticed decentralized exchanges trading fees are higher than trading fees on centralized exchange. Do anyone know the reason? Or it is just way both exchanges type want to operate?

It is probably because DeX's are having less trading volume than the centralized exchanges so they are increasing their fees to make up for their lost profits.

[hugeblack]

You must distinguish between the network fees and the fees that the platform imposes on you. Network fees are variable and vary based on network congestion, the number of addresses, etc. and you can control them based on how well your wallet built (Well-programmed wallets allow you to send with full control of fees.)

centralized exchanges are a database and the main purpose is to make profits, so they charge additional fees to pay their expenses, and whenever the wallet has good programming that allows you to control network fees, but most of them do not.

decentralized exchange must only asks for netowrk fees.

[Findingnemo]

1. Because exchanges are making transaction for you but with the wallets you are making transaction on your own.

2. Exchanges have fixed fee structure and they always asks more fee than the current required fee because that is also a revenue sector for exchanges since the trading fees are not really high so they have to make something out of you in these way.

[hd49728]

It is about bitcoin transaction fees on wallets and exchanges. On my wallet, the highest transaction fee I have noticed before was around 0.0006 btc but I can still set the fee to normal or low to 0.0003 btc and the transaction will be very fast. The transaction time will be very fast like on exchanges. I can be able to set the transactions fee also which may cause little delay, I remember when I set the fee to 0.00005 btc and I conformation within 2 hours.

It is not always true that if today you move your bitcoin at 0.00005 btc for fee and it is confirmed up to 2 hours and you will have to wait almost the same waiting time few days later with the same fee. Next few days are different situation, base on mempool space (empty or heavily loaded). If it is more heavily loaded than today, you will have to wait longer than 2 hours, but if it is lighter than today, you will have faster waiting time (<2 hours).

3 hours ago you can get your first confirmation in one block (about 10 minutes) with fee at 1 sat/byte. At the moment, you have to wait longer, at least next 4 to 5 blocks to get first confirmation with same fee.


Bitcoin Transaction Fees - Everything in one

[Bitcoin_Arena]

2. Is there any exchanges I can edit my transaction fee? If not, why are exchanges not having edit fee?

As far as i know. There is only one exchange that I have ever used that would allow me to edit the withdrawal fees and that was mercatox but still not at the level where you are free to set sats/vbyte
Most exchanges obviously would love to charge higher because they indirectly profit from the hefty withdrawal fees paid by traders

3. About exchanges, I noticed decentralized exchanges trading fees are higher than trading fees on centralized exchange. Do anyone know the reason? Or it is just way both exchanges type want to operate?

It's because unlike centralized exchanges, Decentralized exchanges involve actual movement of funds or the crypto assets being traded from one address to another or involve a lot of smart contract calls/transactions in case of ethereum network and these transactions require a high fee for the order to be executed almost instantly

[jademaxsuy]

Transaction fee will depend on the congestion and traffic on the network. For now due to high volume of transactions per second try to check binance which I took a screenshot in their site.

Probably with these high traffic will generate high dand for the miners and since more users wanted fast transaction they will tend to pay high disregard the transaction fee.

So whenever you wanted to make a small fee from transaction chose a day and time where you can save like others were mentioning about sunday as the best time to make transaction due to low traffic of transaction being made.

[tranthidung]

Transaction fee will depend on the congestion and traffic on the network. For now due to high volume of transactions per second try to check binance which I took a screenshot in their site.

Probably with these high traffic will generate high dand for the miners and since more users wanted fast transaction they will tend to pay high disregard the transaction fee.

So whenever you wanted to make a small fee from transaction chose a day and time where you can save like others were mentioning about sunday as the best time to make transaction due to low traffic of transaction being made.

1,400,000 transactions per second on Bitcoin network, really?

Where did you get the image? Would you mind sharing it, please.

The approximate average TPS of the Bitcoin blockchain is about 5 – though this may vary at times.

From blockchair.com, the statistics for transactions per second is ~ 3.05.

It is not true. The mempool gave you opportunities to move bitcoin at 1 satoshi/(v)byte for some latest hours (get first confirmation in next one block). It has been topped up more last 1 hour but there still is chance to move BTC at 1 satoshi/(v)byte with a little waiting time. With 2 satoshi/(v)byte, you will get fast confirmation in next one block.

But you need to hurry up because I expect mempool will be loaded more. It's already Monday.

[Akiko]

1. Why are transaction fees on exchanges higher than transaction fees on wallets?

Exchange have fixed rate of fees 0.001-0.0005 for widrawal  fees it's exchange and they also need to earn from it users to continue their service.

2. Is there any exchanges I can edit my transaction fee? If not, why are exchanges not having edit fee?

Try coinbase if I remember before you can choose transaction fee before sending I don't know if it's the same now but you cannot edit you just need to choose If you want faster or not, but the price has a big difference for buying and selling compare to other exchange that have fixed rate .

3. About exchanges, I noticed decentralized exchanges trading fees are higher than trading fees on centralized exchange. Do anyone know the reason? Or it is just way both exchanges type want to operate?

Not really we are just  experience congesting in transaction right now that's why its asking for high fees while exchange use custodial wallet which you don't have control and they are the one who can set fees for you to pay .

[nc50lc]

Probably with these high traffic will generate high dand for the miners and since more users wanted fast transaction they will tend to pay high disregard the transaction fee.

1,400,000 transactions per second on Bitcoin network, really?

Where did you get the image? Would you mind sharing it, please.

Based from the URL above:
It's Binance's internal trades which is what they advertise in their "About" page: https://www.binance.com/en/about

@jademaxsuy it's just a "number" for marketing purposes (not a real time or updated data), it's the average trades done in their exchange, not any coin's blockchain.
And the numbers won't affect the transactions that are being mined nor the transaction in Bitcoin nodes' mempools.

[JeromeTash]

Transaction fee will depend on the congestion and traffic on the network. For now due to high volume of transactions per second try to check binance which I took a screenshot in their site.
https://talkimg.com/images/2023/05/14/blob954fc70e597da12e.jpeg
Probably with these high traffic will generate high dand for the miners and since more users wanted fast transaction they will tend to pay high disregard the transaction fee.

The figure in the screenshot is the approximate number of internal transactions in binance exchange due to the buy and sell orders getting filled by different buyers and sellers and not necessarily the transactions on the bitcoin blockchain or any other blockchain.

The process where you place a buy or sell order and you get a coin in exchange for the one you are selling involves an internal transaction or swap in the exchange which is instant

So whenever you wanted to make a small fee from transaction chose a day and time where you can save like others were mentioning about sunday as the best time to make transaction due to low traffic of transaction being made.

This is mostly applicable to bitcoin. For Ethereum the transaction fees have been high even on weekends lately.

[erikoy]

Exchange fee will depend on the exchanges like.here in our place exchange fee is more higher than other exchanges. Base on my understanding is that aside from the transaction fee deducted to every transaction the user will also pay the exchange fee from its operation licenses granted to them by the government. Most likely government will get fee from the exchanges. The worst part would be making cryptocurrency as an asset to which they will take tax on it in every transaction. This will make more the transaction fee to go high.