- >News
- >Ask CryptoVantage: What Are the Best Ways to Avoid Bitcoin Fees?
Ask CryptoVantage: What Are the Best Ways to Avoid Bitcoin Fees?
Bitcoin is a digital, decentralized currency that enables instant payments to anyone, anywhere in the world. As a peer-to-peer technology without a central governing authority, the network’s participants are responsible for maintaining and updating the transactional ledger. This means that an incentive has to be attached to the act of updating and processing transactions.
This is what miners do and the fees paid by network users go to incentivize the participation of miners. As the bitcoin network continues to grow, the number of transactions on its network also grows and miners demand more fees to prioritize transactions.
This has made it almost impractical to use Bitcoin for microtransactions due to the high fees and long delays. The good news is that there are other methods for users to avoid bitcoin fees.
Wait for Traffic to Die Down
If you are not in a hurry, one of the simplest and best ways to avoid paying high fees with your transactions is to simply wait for a time when the network is less congested.
Once the number of transactional congestion decreases, the fees will also go down. This is probably not a preferred method if you need to send money fast or if you are in some sort of emergency. However, if it is just an ordinary transaction that can wait for network congestion to die down, this might be your best option.
The risk with this strategy is that if you link your transactions to low fees, the transaction might temporarily get stuck in the queue or won’t go through at all. To check the level of congestion on the Bitcoin network, check out a site like memepool.space where a higher priority fee indicator will translate to higher network congestion.
Lightning Transactions
If you need to use bitcoin for regular micropayments or transactions, one of the best-known strategies that you can use is lightning transactions. This type of transaction is a two-party payment channel that only exists off the blockchain. As such, it does charge high fees.
For instance, while an on-chain transaction might cost upwards of $25, an off-chain lightning network transaction will cost a fraction of a cent. At its core, the lighting network operates as a side road to the main bitcoin highway.
Therefore, a lightning network user can avoid the high traffic of the main bitcoin blockchain and even prioritize their transaction for faster transaction finality while paying negligible fees.
Use An Exchange with Free Transactions
For many crypto investors their main Bitcoin transaction is simply buying it on a crypto exchange and then transferring it to a private wallet. Then they just let it sit for years to accumulate value.
Therefore if you can find an exchange that offers free transactions than you’ve essentially dodged most transaction fees if you’re a long-term HODLer.
Not all crypto exchanges offer free withdrawals but there are definitely some that do. Check out our updated list of best crypto exchanges to see if you can find one that offers free transactions out.
BTC Still Incredibly Cheap for Large Transactions
It’s important to remember that while Bitcoin may not be the ideal choice for microtransactions it’s a game changer for massive transactions.
Case in point: every few months there are reports of someone moving millions of dollars worth of Bitcoin for a few dollars. This is basically unheard of in the traditional finance world so don’t take it for granted.
Furthermore fees are important for incentivizing miners, who in turn keep the network secure. So don’t sweat the fees too much.
