Cryptocurrency transaction fees you need to keep in mind

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Bitcoin crossed the $ 50,000 mark on Monday. It was the first time he had passed this point in three months. The boost came in light of investors piling on the crypto coin in a bargain buying spree. At its peak, the popular cryptocurrency peaked at $ 50,152.24, a 2.5% increase since mid-May. Speaking on the recent gains made by Bitcoin this week, Edul Patel, CEO and co-founder of Mudrex, said: “If there is an increase in trading volumes and the bulls manage to gain momentum , we might see a dash towards $ 61,000 this week. We’re only at the start of the week and things are already looking exciting for the week ahead. “

Cryptocurrency is the new rage for many reasons. It cannot be found, it is secure and it is a good way to make a lot of money through investments. However, digital currency comes with its own set of drawbacks, such as high market volatility, unpredictability, and a lack of regulation, which does little to inspire confidence in new investors. So, before you dive into the crypto pool, there are a few things you should know.

Trading on crypto exchanges: what you need to know

Much like the shared buying and selling on the stock exchange, cryptocurrency trading is mostly done through crypto exchanges. These exchanges help you as an investor to trade cryptocurrencies based on their current market value. This value is determined by demand, supply and the general state of the market. There are several fee levels you should be aware of before attempting this.

Exchange fee

The first level is that of exchange costs. This is the amount charged by the exchange to complete a buy or sell order. Most of the exchanges in India have a fixed fee model, but the final cost depends on which platform you choose. These fees are the primary mode of income from these exchanges, so keep that in mind when choosing. The fees charged by these exchanges are generally between 0.1 percent and 1 percent or more for each transaction. This means that if you invest around $ 1,000 in the trade, the commission on the trade would be around $ 100.

Network charges

The essential premise of cryptocurrencies is that they must be mined using a lot of hardware. These network fees go to the miners who devote their time and effort to it. It also helps you verify and validate every transaction to make sure your crypto coins haven’t been used before. These fees, however, are not controlled by the exchange and are set up by minors and are entirely demand-based. The more traffic there is on the network, i.e. the higher the demand, the higher the costs can be.

Wallet fees

A crypto wallet is like an online bank account for your digital coins. It helps protect your cryptocurrency. In addition, it also allows the holder to send and receive coins. Think of it as a Paytm wallet. Most of these wallets don’t charge you any fees, but if you go with a crypto wallet that’s built into most exchanges, you might face additional wallet management fees. One would use the wallet to store the cryptocurrency in the middle of the exchanges. Fees kick in whenever you send crypto coins to someone else. This is basically a form of network fees.

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