Transaction fees

Transaction fees

What are 'transaction fees'?

Transaction fees are the fees necessary to execute a transaction on the Blockchain. Generally there are two different forms of transaction fees: fixed transactions fees and variable transactions fees.

Fixed transaction fees: You pay a fixed amount of coins/tokens to execute a transaction.

Variable transactions fees: You pay a transaction fee depending on the amount coins/tokens. (E.g. 5% on total sum)

Why do 'transactions fees' exist?

Some cryptocurrencies, despite their decentralization, raise some sort of transaction fees within their Blockchain. The motives behind this are different as every project has other token metrics and a specific token model. Nevertheless, most people pay transaction fees to transfer coins/tokens off from exchanges as the popular ones are centralized and profit-oriented companies. They charge certain commission fees for administrating the accounts and guaranteeing a certain security standard. It is important to understand that transaction fees vary from exchange to exchange. Generally, bigger exchanges liken Coinbase or Binance have slightly higher transaction fees due to good reputation.

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