Potential Cryptocurrency Fees: Everything You Need to Know

There’s no such thing as a free lunch in this life. Everything has a cost, monetary or not. In traditional finances, companies are take their own part for the service(s) they offer. For instance, according to a Bankrate survey, American bank customers pay around $288 yearly only in custody fees. And that’s without other kinds of fees: opening accounts, ATM withdrawals, excessive transactions, wire transfers, etc. Cryptocurrencies also have their own fees, but they’re often much cheaper.

Other decentralized services, like escrow, exchanges, or loan platforms will also take their own fees. If you use internal tokens without their own main network (such as stablecoins), they’ll take some transaction fees as well, in the form of the native coin of that network. So, let’s explore a bit more into what may cost you to use cryptocurrencies.

Payment Transaction Fees

These are the fees you pay when you send or receive cryptocurrencies. The fee amount can vary based on the network and congestion, and it can go from zero to a few dollars. For example, Bitcoin transactions typically have a network fee, and the fee amount depends on factors like transaction size (not the same as the amount of funds) and network demand. The transaction size depends on its type, inputs, and outputs.

Or, in other words, the simpler the transaction is (e.g., a payment for one person), the cheaper it would be. It’s often the same for most coins and networks. Some cryptocurrencies, like Bitcoin, use a fee market where users can choose to pay higher fees for faster confirmation times.

It’s important to note that crypto transaction fees are paid on the main/native coin of that network (BTC in Bitcoin, ETH on Ethereum, GBYTE in Obyte, etc.). Besides, they’re not taken by a company or another centralized entity. Instead, they’re a reward for miners in Proof-of-Work networks like Bitcoin, validators in Proof-of-Stake ledgers like Ethereum, or order providers and subsequent users in DAGs like Obyte. Some of them are in charge of accepting (in blockchains) or ordering (in Obyte) all transactions and could be any user of that platform.

Fees for Internal Features

Many crypto networks offer extra features beyond mere payments. They’re often smart contracts, oracles, and decentralized applications (Dapps) with diverse purposes. A smart contract could be an internal token (e.g., a stablecoin), an escrow service, an Initial Coin Offering (ICO), a Non-Fungible Token (NFT) collection, etc. A Dapp could be a marketplace, a game, a loan platform, a social network, etc. And an oracle is a record of all kinds of information.

If you’re creating or transacting with any of those, the network will take its own fee. Even if you’re not making a payment. For instance, a fee may be taken when creating a smart contract in an escrow service, or when sharing information on the network in the form of an oracle. Indeed, if you send any type of information to be registered on the ledger, even a short message, a small fee will apply. Remember that most network fees in crypto are determined not by the amount of funds, but by size (in bytes) and complexity of the transaction.

Exchange Fees

This is a common process with cryptocurrencies, and it’s often the most expensive you may face when handling these assets —depending on the method, currencies, and platform you use. A decentralized exchange (DEX) offers more control over your assets than a centralized exchange (CEX), but the fees may vary according to your needs. DEX platforms only take trading fees, often around $0 (e.g. $0.0001), but it’s only possible to transact digital assets (not fiat money).

On the other hand, centralized platforms may have their own set of fees, including deposits, withdrawals, average transactions, and different types of trades. These fees vary among exchanges and may depend on your trading volume, with higher-volume traders often receiving lower fees. The average is between 0.1% and 6% when handling fiat money, depending on the payment method (wire transfer, credit or debit card, digital wallet, etc.)

Fees on other platforms

Besides network or exchange fees, every crypto platform may take its own fees for the services they’re offering. For instance, Dapp creators may take a fee for playing their game, creating NFTs, or using their loan platform. As we mentioned above, a Dapp could be a lot of things, maintained by a professional team that could be part of a company or foundation. Therefore, they may take fees to support ongoing development and maintenance. It’s important to check the terms and conditions in every particular case.

Fees in Obyte

Obyte is an ecosystem with a wide array of features, including smart contracts, oracles, and tokens. Every transaction sent to the DAG, payment or not, will take a small fee depending on its size in bytes. For example, if your transaction's data consumes 800 bytes of disk space, the fee to submit that transaction to the DAG will be 800 bytes of the currency. That’s the average, indeed, and it’ll cost you around $0.00001 in Obyte’s native coin (GBYTE).

If you create a new token in Obyte or import/export external coins through the Counterstake Bridge, additional fees will apply. For instance, the user-friendly Obyte Asset Registry takes 0.005 GBYTEs (around $0.05) for token creation, and the Counterstake Bridge takes 1% per transfer. Other Obyte Dapps have their own fees:

• Oswap.io (DEX): between 0.1% and 0.5% (depending on assets and pool), plus 1% of exit fee (for removing liquidity from the pool).

• LINE Token (Rewards): 1% origination fee per loan.

• OSWAP Token (Farming and Staking): 0.3% per trade.

• Attestations (Self-sovereign ID): $0 for GitHub, around $0.00049 for email, $8 for real names, $79 (refundable) for Accredited Investors, and between 1 GB and 10 GB ($10 to $100) for customized usernames –depending on its length.

• Flight Delay Insurance: 5% above the probability of delay.

• Prophet (Prediction Markets): 1% for buying tokens and 2% for selling them.

• Bonded Stablecoins (Rewards): depending on whether you move the price close or away from the peg: the further away from the token peg you move the price, the higher the fees (they can even reach 100%). On the contrary, when you move the price closer to the stablecoin peg, the fees aren’t only zero, but rewards are paid to the user.

• Arbstore (Escrow + Arbiters): 0.75% per contract.

  
  

It's important to carefully read the terms and fee schedules of the specific cryptocurrency exchanges, wallets, Dapps, or services you use, as fees can vary widely. Additionally, keep in mind that the fees associated with cryptos can change over time, and they may be influenced by market conditions, network congestion, and other factors.

In any case, Obyte is offering one of the most inexpensive options in the whole market. Average fees on networks like Ethereum or Bitcoin often start above $1 per transaction, while GBYTE operations are far from that mark. Besides, since Obyte is a DAG network, the more users it gets, the faster transactions become —unlike blockchain networks. Don’t miss these advantages!