When you buy your first token, one thing that will surprise you is how many crypto fees there are. You may end up spending $105 to receive only $100 worth of tokens.
What about your $5? Is it gone forever? The short answer is: yes, it is.
Cryptocurrency isn’t free like cash; there are some costs involved, and it pays off to know what they are before you get started. For an overview of the different fees for cryptocurrencies, read on!
What Are Crypto Fees?
Cryptocurrency fees are the costs of receiving or selling cryptocurrencies. They’re paid to miners, the people who process transactions on blockchains.
These fees are also given to exchanges, which facilitate the trading of cryptocurrencies. You can pay fees in a variety of ways, but most commonly they’re charged as a percentage of one’s transaction amount.
What Are Some Common Types of Crypto Fees?
The fees that you pay for crypto trading can vary depending on the type of cryptocurrency and which application you’re using.
The most common types of crypto exchange fees are:
- Selling fees
- Buying fees
- Withdrawal fees
- Deposit fees
Transaction fees are important because they help to keep the network secure and running smoothly. By paying fees, users show their support for the network and encourage miners to continue processing transactions.
Exchanges also need to charge fees in order to cover their costs and make a profit. Otherwise, they could not stay in business.
Maker and Taker Fees
Exchanges charge taker fees when you remove liquidity from the order book by placing a market order. Maker fees are charged when you add liquidity to the order book by placing a limit order.
Binance is a popular cryptocurrency exchange that offers low trading fees. It’s one of the largest and fastest-growing cryptocurrency exchanges in the world. As with most other crypto exchanges, you’ll need to transfer your funds from your bank account or another service like Coinbase into your Binance account before you can trade on it.
Binance charges a 0.1% fee for every trade you make on its platform, which makes it one of the cheapest options available if you’re looking to buy cryptocurrencies with fiat currency (like US dollars). This fee is applied as part of each transaction executed on their platform.
If you are new to Binance and do not have any coins, you can buy Aave to begin trading.
Trade With Lower Transaction Fees
Hopefully, this article has helped you gain a clearer understanding of the crypto fees on exchanges. If you’re just starting out with cryptocurrencies, then don’t worry about paying fees right now. Instead, focus on learning when they occur.
When you’re ready to buy your first cryptocurrency, only then should you look into which exchange is right for you. In the meantime, learn how to trade for as little as possible by reading out our other finance posts. Enjoy!