How to calculate network fees when sending BTC and ETH: In this short guide, we’ll help you better understand the blockchain fee process
The ability to send cryptocurrency to another party – regardless of who they are or where they live – is a power to cherish. Dispatching digital assets without having to involve an intermediary takes a matter of seconds and makes a mockery of the interbank charges users must accept when sending fiat currency internationally.
That said, it’s good to be mindful of the network fees that each cryptocurrency transaction (tx) entails. Sending crypto is cheaper than many traditional payment methods, but it’s certainly not free – and on occasions can be downright expensive.
In this short guide, we’ll help you better understand the blockchain fee process, so you’re able to work out what sort of fees you’re likely to pay whenever you send the two most popular cryptocurrencies, bitcoin (BTC) and ether (ETH).
What are network fees?
If you’re new to the cryptosphere, you might be wondering: what on earth are network fees? After all, there’s no bank in blockchain. So, who sets the rates and who’s profiting?
In short, network fees are broadly synonymous with transaction fees, and they are paid to cryptocurrency miners as a reward for adding transactions to the public ledger. Network fees must be paid for all transactions to ensure they get validated, and fees represent the fuel that keeps the gear wheels turning.
Of course, not all transactions are alike: miners are financially incentivised to prioritise the confirmation of tx that carry a higher fee. As for the fees themselves, they depend on various factors such as network activity (since a finite number of transactions can be included in any block) and the data size of the transaction, with users free to choose between low, medium or high transaction speeds. Naturally, the faster the transaction speed, the higher the fee.
How to calculate crypto network fees
So, you want to send bitcoin or ether to another wallet and you’re keen to know the network fee. How can you find out?
Well, if you’re using the Zumo app, you don’t have to calculate: Zumo will do it for you. When you send funds, you can check the estimated network fee on the transaction confirmation screen before you initiate the transfer: the amount will be shown in crypto (0.000014 BTC, for example) and fiat (£0.11). At this stage, you can either cancel or confirm.
But what if you want to know in advance the sort of fee you can be expected to pay? As mentioned, the price depends on factors such as network conditions, data size, transaction speed and, of course, the asset itself: sending ETH, for example, is generally cheaper than sending BTC since the latter has a higher mining cost.
In the case of ETH, users can visit gasnow.org to get a real-time indication of gas price, denominated in gwei, aka nanoeth, a unit equal to one billionth of an ether. The website will show the gwei amount associated with slow (>10 minutes), standard (3 minutes), fast (1 minute) and rapid (15 seconds) transaction speeds. As with the Zumo wallet, you also get to see the price in fiat (in this case, US dollars).
What about Bitcoin network fees? Thankfully, there are a few online calculators available. privacypros.io, for example, provides the network fees associated with having your transaction mined within three blocks (30 minutes) or six blocks (1 hour), as well as within the next block (10 minutes). The site also provides a chart showing the historic daily average bitcoin transaction fees, denominated in satoshis per byte.
Remember, with the Bitcoin blockchain, blocks are designed in such a way that each one must be less than, or equal to, 1MB (1,000,000 bytes): on average, a block is mined every 10 minutes.
Best practice for sending BTC and ETH
If you want to avoid paying high network fees, and get transactions confirmed more quickly, it makes sense to stick to off-peak times, when the network isn’t labouring under insane congestion. Of course, sometimes – as in a rampant bull market – this is easier said than done.
Research shows that the Ethereum blockchain is busiest from 1pm UTC to about 6pm UTC, roughly correlating with the early US trading hours between 8am EST and 1pm EST and dovetailing with European working hours. Generally speaking, network fees tend to be lower on Sundays.
As for Bitcoin, txstreet.com is a handy resource for appraising tx and mempool data, enabling you to determine the best time to send a transaction. The mempool, for the uninitiated, is where all transactions wait to be confirmed by the Bitcoin network. Generally speaking, as with Ethereum, the network is less congested over the weekend, giving transactions more space to clear.
Ultimately, timing is everything. Time your transaction just right and you’ll be able to send ETH and BTC for a reasonable network rate.
FAQs
— transaction fees will be charged. Two of the main factors that determine Bitcoin transaction fees are the data volume of the transaction and the speed at which the user wants their transaction completed. As of Aug. 23, 2022, the average Bitcoin transaction fee is 0.000044 BTC, or $0.957.
What is the network fee for sending Bitcoin? ›
Service fees explained
Service fees vary greatly depending on a number of factors, such as the type of transaction, the payment method and the blockchain on which it takes place. For instance, Coinbase charges a fee between 0.5% and 4.5% of the amount transacted, while Crypto.com's fee ranges from 0% up to 2.99%.
How do you know how much a network fee will be before you send cryptocurrency? ›
When you send funds, you can check the estimated network fee on the transaction confirmation screen before you initiate the transfer: the amount will be shown in crypto (0.000014 BTC, for example) and fiat (£0.11).
How are Coinbase network fees calculated? ›
Coinbase Transaction Fees
Coinbase considers both fees when you preview a transaction. A U.S. customer making a purchase above $204, for example, will have the fee assessed at the 1.49% rate up to the maximum purchase amount.
How is network fee Ethereum calculated? ›
The total fee is calculated as: (gas units (limit) x gas price per unit). In this example, that would equal: 21,000 x 200 = 4,200,000 gwei, or 0.0042 ETH.
How are network fees determined? ›
Fees are determined by the amount of network traffic, supply of validators, and demand for transaction verification. The higher the demand and traffic, the higher the fees. When traffic and demand is lower, fees become lower.
How do I send Bitcoin without network fees? ›
Summary. When you create a transaction using the Bitcoin.com Wallet, you can customize the fees you pay for using the public blockchain network. Bitcoin.com does not charge any additional fees for sending and receiving cryptoassets or for transacting on public blockchain networks.
Is it cheaper to send BTC or ETH? ›
Regardless of the network, both Bitcoin and Ethereum cost money to use. Historically, Bitcoin transaction fees have frequently been lower than those on Ethereum.
What is cryptocurrency network fee? ›
Network fees occur every time you send cryptocurrency from one address to another. They are transaction fees that are paid to cryptocurrency miners - incentivizing them to add transactions to the public ledger, keeping the network secure. The fees paid depend on the network you use.
What is the average ethereum network fee? ›
Ethereum Average Transaction Fee is at a current level of 0.647, up from 0.5272 yesterday and down from 4.126 one year ago. This is a change of 22.72% from yesterday and -84.32% from one year ago.
Coinbase charges a flat 1% transaction fee on all cryptocurrency transactions.
How do I avoid Coinbase wallet network fees? ›
These fees can be avoided if you withdraw your funds via Coinbase Pro. If you go into the 'My Wallets' of Coinbase, you can transfer funds from Coinbase to Coinbase Pro then withdraw from Coinbase Pro, without having to worry about fees.
Why are network fees so high on Coinbase wallet? ›
Coinbase fees are the cost of using the Coinbase exchange. The reason why Coinbase charges higher fees than other exchanges is that it wants to make sure that anyone can use it to buy and sell cryptocurrencies, including those who might not have a lot of money to spend on trading.
Why network fee is in ETH? ›
This fee is necessary to prevent spamming of the network. Because there is limited space in each Ethereum block, the gas fee market is often used to prioritize which transactions will be included in the next block. Each transaction needs a certain amount of computational resources to complete, which requires a gas fee.
How do I set Ethereum transaction fee? ›
To calculate the cost of an Ethereum transaction today, the base fee is added to the priority fee, which is then multiplied by the gas limit. The formula looks like this: gas units (limit) * (base fee + priority fee).
Who pays the network fees in crypto? ›
To ensure that transactions are processed on cryptocurrency networks, outgoing transactions to external cryptocurrency addresses typically incur a "mining" or "network" fee. This fee is paid to cryptocurrency miners, which are the systems that process the transactions and secure the respective network.
Are ETH network fees always the same? ›
The transaction fee is paid in ETH (Ethereum). Transaction fees are the same regardless of how much you are transacting. Depositing $1 or $1,000,000 will have the same transaction fee.
What is the cheapest way to send Bitcoin? ›
Using the Lightning Network is a faster and cheaper way to send and receive bitcoin transactions. There are typically little to no fees involved, and it's used to send smaller amounts of bitcoin.
Which wallet has the lowest transaction fee? ›
Binance is an exchange with one of the cheapest transaction fees among all cryptocurrency exchange platforms. It allows you to create an online crypto wallet on the platform as a user. You can then trade other cryptocurrencies and NFTs. It also allows users and miners to earn interest.
Which network should I use to transfer Bitcoin? ›
A simple rule of thumb is to always select the coin's native network. For example: BTC should be sent to your Ledger Bitcoin address via the BTC/Bitcoin network. ETH and ERC20 tokens should be sent to your Ledger Ethereum address via the ETH/ERC20 network.
Median-Sized Fees Tap $0.69 per transaction, L2 Fees Slip Lower. On July 2, 2022, average fees tapped a low of 0.0016 ether or $1.67 per transfer. The last time fees on the Ethereum network were this low was in mid-November 2020. On November 12, 2020, the average ETH fee was 0.0034 ether per transfer or $1.55.
Why are BTC network fees so high? ›
Supply and demand are the biggest factors in high transaction fees. Once a blockchain network has a high demand for transactions, costs naturally rise since the supply cannot keep up.
Is Ethereum network fee fixed? ›
Why are ETH gas fees so high? One of the things that make ETH gas computation so tricky is that it's never been a fixed price. The amount of gas you'll need to pay will depend on how large or complex your transaction is.
How do I bypass crypto fees? ›
Withdrawals- Fees & Limits
As with all blockchain transactions, they come with a fee. Note: Transferring crypto to your Crypto.com Wallet App's address will also incur a fee if completed on-chain. To avoid a fee, please use the Withdraw to App function.
How do I reduce network fees on Metamask? ›
Set a max gas fee
On Metamask, you can set your gas fee to “Low” before confirming a transaction. If you want to save even more gas, click on Advanced Options. In this tab, you can set the max fee to slightly above the 7 day lowest historical gas price from Etherscan chart.
What is the cheapest transaction on the ethereum network? ›
Indeed, as of August 2022, the network recorded its lowest average transaction fees of $3, the lowest level since December 2020, according to Kaiko's research shared with Finbold on August 4.
Which crypto has lowest transaction fees 2022? ›
Cardano users can expect to pay around 0.15 ADA for most transactions – the equivalent of $0.08 at today's prices. While the charge may climb slightly as Cardano's popularity develops, ADA will remain one of the lowest fee cryptocurrencies in 2022.
Why is BTC network fee so high? ›
Network Congestion on the Blockchain Competitively Raises Fees. The main reason for high bitcoin miner fees is supply and demand. The bitcoin block size is 1MB, which means that miners can only confirm 1MB worth of transactions for each block (one every ten minutes).
Which crypto has no network fee? ›
IOTA is one of the most eco-friendly cryptocurrencies on this list. IOTA is an “open and feeless data and value transfer protocol.” The IOTA Foundation is a non-profit organization based in Berlin that heads the development of the IOTA token. IOTA doesn't charge any crypto transaction fee at all.
What is the cheapest crypto network fee? ›
The average transaction fee for Dash is between $0.2 and $0.3, which is significantly cheaper than Bitcoin. More importantly, transaction speeds are significantly higher on Dash. It's a fork of Litecoin essentially, which is, in turn, a Bitcoin fork.
The Future of Bitcoin and Ethereum Transaction Fees
Bitcoin transaction fees can often be lower than Ethereum's ether transaction fees. This is because ether can be used to deploy transactionally intensive decentralized applications (dApps), whereas Bitcoin is used only for payments.
Why is my Ethereum network fee so high? ›
From the above calculation it is rather easy to predict the Reasons for increasing cost of Ethereum gas fees. Ethereum's gas fee would jump up if there is the network is too congested. In that case, a lot of miners would seek higher fees to process the transactions.
What is the cheapest way to transfer crypto? ›
The cheapest way to transfer ETH from country A to country B is to use the decentralized exchanges that accept Ethereum deposits and withdrawals. Vertcoin: 0.002 dollars fee in average. Bitcoin Cash: 0.0025 USD fee per transaction. Dash: exchange fee equals $0.0051.
