Withdraw Fees for BTC and ETH

[Franklin Black]

I have been searching for a good explanation about this, maybe here you may clarify it to me:

To withdraw ETH from Binance to a Metamask we have the Etherium (ERC20) network, the Arbitrum One network and others. The difference of fees is brutal. Why would I use ERC20?

The same happens to Bitcoin. Using BTC Network and LIGHTNING makes a crazy difference in fees. What is really the difference?

[Charles-Tim]

The same happens to Bitcoin. Using BTC Network and LIGHTNING makes a crazy difference in fees. What is really the difference?

The difference is that lightning network is not as secure as bitcoin on-chain network. Also that you can not use the lightning network for transactions huge in amount to save fee. Lightning network wallets has to be online while you can transfer bitcoin onchain while using cold storage wallets and other secure means. For security reasons, you still have to depend on bitcoin blockchain.

[Darker45]

The difference is that you are actually making transactions on layer 2 networks, not on the main network, not on-chain. Transactions done on layer 2 networks are off-chain transactions. At some point, you will have to transfer your funds back to the main network, cross the bridge, and it costs you as high, if not higher.

Secondly, there's the issue of security. Arbitrum and the Lightning network are not as secure as the Ethereum and Bitcoin blockchains, respectively. And then there's the issue of adoption. Your Ethereum on Arbitrum or your Bitcoin on Lightning aren't as widely accepted as when you have them on their native blockchains. ETH and BTC from their respective blockchains can be sent anywhere. Layer 2 solutions aren't as established.

[rat03gopoh]

Technically, each of the optional chains has their own scalability solution that offers lower fees for faster confirmations than the main layer (L1) network.
Else, it's the exchange's internal policy to set any fees (generally 50% higher than the actual tx fee required and it's flat). In fact they may charge regular fees to process withdrawals under $10 bitcoin, but they process it using LN.

[Davidvictorson]

The same happens to Bitcoin. Using BTC Network and LIGHTNING makes a crazy difference in fees. What is really the difference?

Using the BTC network means that the individual, if he or she wants very quick confirmation on transactions, would have to pay a higher fee. The wait time is short. The reverse happens for a lower fee, resulting in a longer wait time before confirmation. In the Lightning Network, there are no congestions or high fees, as all transactions are done off-chain; therefore, they are very cheap and fast. I will pick the Bitcoin network over the Lightning Network because it is more secure, and transactions carried out there are recorded permanently and cannot be altered.

[sunsilk]

It's known that ERC20 transactions are literally brutal and high. As for the actual Bitcoin network, it has been expensive but then right now it had dropped but still far from the common low fees that we used to have.

The difference is about the chain itself. As explained by darker, that's how it goes. While for LN, it's ideal for smaller transactions but it's quicker and cheaper compared to the actual BTC transactions.

With all of these support from other chains makes it easier for us to save from fees, so you have to be aware of that too if the crypto you're withdrawing is supported by the other chains.

[dkbit98]

The same happens to Bitcoin. Using BTC Network and LIGHTNING makes a crazy difference in fees. What is really the difference?

There is a difference between on-chain fees and Lightning Network that if off-chain, so there is no transaction for withdrawal using LN, but you eventually have to move that on-chain and pay some transaction fees.
All other chains having some random token called bitcoin is not real Bitcoin, since CZ and friends can cancel it and freeze it whenever they want.

[Franklin Black]

It was very clarifying. Thank you all!

So, as an example, to transfer small ammount of ETH to a Metamask just to farm some possible airdrops using Arbitrum sounds like a better option. In this specific case, I intent to use it on Scroll (not sure if it is a good choice for airdrop farming, but this is discussion for another topic, I guess), so I would have to withdraw to Arbitrum Network and bridge it to scroll somehow (maybe Orbiter?)