When exchanging digital assets, users pay fees to structures that provide services for buying and selling them. The team of Boosty Labs – blockchain development company – explains what the commission depends on when buying a cryptocurrency and withdrawing it from the exchange, where and how to buy cryptocurrency with a minimum commission, and whether it is possible to transfer cryptocurrency for free.
Crypto exchanges and exchangers provide services for the exchange of digital currencies, acting as intermediaries between sellers and buyers, and charge a fee for this – a commission. Fees will differ depending on the exchange method. For example, crypto exchanges use a deposit system, so you can exchange cryptoassets an unlimited number of times before withdrawing funds to your wallet.
Exchangers, in addition to P2P exchanges, transfer cryptocurrency directly to the addresses of users' wallets, so each exchange includes a service commission and a payment for confirming the transaction by miners.
Types of commissions on cryptocurrency exchanges
Various services calculate service fees based on how they function. Cryptocurrency exchange commissions are divided into two types:
Trading commissions or exchange fees. Charged for each trade on the exchange when you convert one cryptocurrency to another. In this case, only a formal exchange takes place: the cryptocurrency does not move between wallets on the exchange. Therefore, often the exchange commission does not exceed 0.5% of the transaction amount.
Cryptocurrency withdrawal fee. Users pay for the services of the exchanges and cover their transaction costs. This type of commission depends on the network fees of the blockchain or is set by the bank for the transfer if you use fiat.
As a rule, crypto exchanges do not charge fees for depositing cryptocurrencies. Large platforms support automatic transactions, and when making a deposit, the user pays the commission, while the exchanges do not pay for incoming transactions. This is why deposits are usually made free of charge.
Сurrency exchange office commission
Classic currency exchange offices for the purchase/sale of digital assets include both types of commissions when making a transaction, so the exchange rate differs from the exchange rate by at least a few percent. This difference can reach more than 50% for some exchangers.
Due to the fact that the duration of transactions is longer, and their frequency is much less than that of exchanges, the commission for the transfer of cryptocurrency by currency exchange offices is charged in a larger amount – most often at least one percent. The limits will also be higher, since it is unprofitable to exchange small amounts neither for exchangers, nor for users.
Exchanges with minimal fees
The minimum cryptocurrency commission is achieved due to the large trading volume. Therefore, as a rule, the larger the crypto exchange, the less fees users pay. Here you can draw an analogy with a cafe: when the flow of customers is quite large, even with a low cost of goods on the menu, the institution receives a decent profit, which, in turn, allows setting competitive prices, attracting customers with promotions and discounts.
Cryptocurrency with the lowest commission can be bought on popular exchanges and exchangers. For such exchanges, the commission per transaction is on average 0.1% – 0.2%. Some sites provide discounts on commissions if a number of conditions are met:
Achievement of a certain volume of trade for a specified period;
Payment of fees with coins / tokens issued by exchanges;
Discounts provided to users under the referral program.
Promotions will provide buyers with the lowest cryptocurrency commission, but don't forget about other costs for deposits and withdrawals on exchanges.
In fact, if you use the services of crypto exchanges, you will always pay commissions. However, if you are wondering how to buy cryptocurrency without commission, then here are some options:
Participate in promotions from the exchange
Periodically, crypto exchanges hold promotions for newbies: for example, they provide vouchers for payment of commissions and a period during which traders can buy and sell cryptocurrency for free.
Become a P2P Seller
On P2P exchanges, users can not only not pay commissions, but also earn commissions themselves. However, becoming a contractor is not easy for several reasons:
A reputation is needed, which is not easy to earn, and it will take a long time;
You must pass KYC (identity verification).
This method has other disadvantages as well:
There are risks of facing fraudsters and blocking bank cards;
Applications can be expected within hours or even days due to high competition;
You can specify limits, but if you specify a specific amount, it will be more difficult to find a client.
Cryptocurrency wallet fees
Another way to buy cryptocurrency is to use wallets. It is quick and convenient, since the funds are immediately transferred to the crypto wallet and, as a rule, you do not even need to enter the address: this way you will avoid mistakes when specifying the bitcoin address.
Miner (network) commissions
Cryptocurrency transaction fees depend on the chosen blockchain network and vary depending on the current network load: the more actively users make transfers, the higher the fees will be. Thus, the auction model of including transactions in the block (whoever gives more will be confirmed faster) provokes users to overstate commissions.
How to pay less commissions
Commissions of exchanges and exchangers directly depend on the amount of transaction fees of miners. When the number of transactions decreases, on some exchanges the same happens with the transaction fees. But they do not immediately reduce commissions and for some time users overpay «conditionally network» commissions. A number of exchanges do not reduce transaction fees at all in the event of a decrease in mining fees.
Note that when the network load increases, exchanges instantly raise their «network fees» for withdrawals.
You can track the dynamics of network fees using blockchain observers.
CoinMarketCap Blockchain Explorer
Bitcoin Cash (BCH)
Etherscan (ERC-20 token)
Note: Tron blockchain provides the ability to freeze assets in order to receive resources for transactions (energy and bandwidth) and not pay commissions. However, even in this case, a minimum fee of 1 TRX (TRC-20) will be charged when withdrawing from crypto exchanges.
Note: Blockchain explorers do not track ADA transaction fees as they are so small that they are less than $ 0.01.
Comparison of network charges
Let's compare the mining fees that users pay on different blockchains:
Average transaction fee
Bitcoin Cash $0.01
Tron $0 — $0.05
Maximum since early 2021
Bitcoin Cash $ 0.05
Tron $ 0.16
Litecoin $ 0.09
If you want to buy Bitcoin or Ethereum, then it will be unprofitable to exchange small amounts, since commissions can reach and exceed tens of dollars, depending on the load on the network. To save on fees, more productive blockchains are suitable: Bitcoin Cash , Litecoin, Cardano and Tron. How and where to buy cryptocurrency is up to you.