Ask CryptoVantage: What Are Some Tricks for Avoiding Crypto Fees?

What Are Crypto Fees?

From the moment crypto is sent, transaction fees pop up. This is needed to sustain the vast computer networks that underpin various blockchains and to ensure their security.

Transaction fees are mostly dependent on the amount of crypto you wish to send, how fast you want your crypto out of your wallet, and last but not least, the level of congestion on the network.

Best Ways to Avoid Crypto Fees

You might have guessed it already, but one of the easiest and best ways to avoid crypto fees altogether is to buy your favourite crypto coin and just hodl (hold on for dear life)! But of course, there are a few additional tricks you can apply when looking for low or no-fee transactions.

Avoid Busy Times For Buying/Sending Crypto

Another easy way to avoid high crypto fees is to keep an eye on the level of congestion of the network you are about to use. When high, it might be beneficial to simply wait until a time when the network is less congested. Because once the number of transactional congestion decreases, the fees will also go down.

In general most blockchains are busiest during the peak trading hours in the USA. Roughly 8 am EST to 1 pm EST.

Use a Layer 2 Like Lightning Network or Arbitrum For Ethereum

If you are looking to use bitcoin for regular micropayments or transactions, then the Lightning Network will become your best friend. The so-called lightning transactions are a two-party payment channel that only exists off the blockchain, and as such, provides faster transaction finality while paying negligible fees.

Another great way to save big on rampant transaction fees is to use another layer-2 solution, Arbitrum, which is similar to the Lightning Network but acts as a solution for the congestion and high fees on the Ethereum network.

Find Exchanges With No/Low Fees

You could also be on the lookout for exchanges that offer free transactions. There are plenty of exchanges that claim not to charge any fees. However, they make their profits by charging you a premium on the bitcoin they sell. In other words, you probably end up paying the fees, no matter what.

It could also pay to do some comparison shopping amongst the many exchanges that are out there. Don’t forget: they all want your hard-earned cash, so do some homework and find those deals and discounts. But keep security at the top of your list. 

Here’s a look at some of the best crypto exchanges.

Trade Crypto Face-to-Face

If you are really adventurous and unshakeably determined to save on fees, you could also opt to buy crypto from a seller face-to-face. However, watch out for scammers if you choose to go this route.

We would recommend that you deal with crypto fees over getting mugged in some dark alley.

Conclusion

Remember the saying, “there’s no such thing as a free lunch,” which communicates the idea that it is impossible to get something for nothing? The same goes for crypto fees. They are important to compensate miners and validators who help keep the network secure. Plus, the people running exchanges have to make a living as well, no?

There’s currently no way around paying some amount in fees when you transact crypto. But perhaps it takes the sting out of it, if you understand why they exist, and where your fee money is going.

Also, moving huge amounts of Bitcoins, sometimes millions and even billions can be done in a heartbeat and for just a few dollars. This is unheard of in the traditional financial world. So, perhaps we shouldn’t worry too much about crypto fees.