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In our previous post, we discussed what blockchain fees are and their types. Indeed, blockchain networks operate in a zero-trust environment and each new block added to the blockchain is seen for everyone around the network. That’s why the block cannot be just added automatically, every transaction is verified by miners operating blockchain nodes (computing units that build the blockchain network). Miners add users’ transactions to the block. Network fees are the way users pay miners for their services.
Other than network fees, there are platform or trading fees. These payments are similar to traditional banking fees when bank customers are charged extra if they send money or exchange currencies. There are different types of trading fees and they vary from platform to platform. The present post aims to explain how to minimize fees and don’t overpay while making blockchain transactions.
How to reduce cryptocurrency fees?
1. Look into the exchange fee structure
If users have to go to exchanges like Bitstamp, Coinbase, Kraken, Binance, etc, they should better peek into the customer support section on the website and check the fee structure. Not all exchanges speak loudly about their withdrawal fees. Sometimes the exchange looks great until you try to move your digital assets somewhere else.
To make sure that exchange withdrawal fees are acceptable, try to buy and withdraw a small sum of crypto first. This will help you find out where the hidden fees are and whether you should proceed with that exchange or not.
2. Use MPC crypto wallet for cryptocurrency transactions
Multi-party computation (MPC) technology helps to minimize the communication between the wallet and the blockchain by hosting transaction signing processes off-chain. To compare, a multisig wallet or a smart contract wallet involves a lot of communication with the blockchain when each stage of transaction signing requires network fees.
3. Find and use exchanges with trading fee discounts
Trading fee discounts are like loyalty points. Every transaction comes with additional points which could be used later as a payment for a transaction.
4. Go for crypto-to-crypto transactions
If we compare crypto-to-crypto transactions and crypto-to-fiat transactions, the first type is cheaper. Also, users may protect themselves against crypto volatility by swapping their crypto with stablecoins. Stablecoin is a cryptocurrency whose price is connected to the US dollar.
5. Make transactions when network load is low
It’s a well-known fact that the busier the network is, the higher the fees are. There are some websites that help users to estimate Ethereum or Bitcoin fees but the major rule is quite simple. The lowest transactions are on early mornings on working days as well as throughout Saturdays and Sundays.
6. Try not to rush to make a transaction
Usually, users of crypto wallets can define the transaction fee to some extent. If they want a transaction to be written in the block as soon as possible, the network fee will grow. If they have time to wait, then the fee will be optimal. If they are eager to wait for a long time and provide a very small fee, then there could be a situation when the transaction gets stuck for days or even gets canceled.
To sum up
The fees you have to pay in web3 cannot be eliminated but they can be treated cautiously. Network fees could be minimized if you operate MPC-powered crypto wallets, such as Spatium Wallet. If you would like to escape centralized exchange fees, you also should look in the direction of Spatium Feeless Wallet which will soon perform peer-to-peer swaps and provide crypto exchange functionality. Spatium is a self-custodial solution where only users can get access to their digital assets.
Get the Spatium Wallet App and enjoy how user-friendly and convenient it is. Protect your crypto assets with MPC cryptography and save on fees while sending transactions to blockchains. Moreover, soon Spatium will enable peer-to-peer crypto swaps when you don’t need to go to centralized exchanges to swap cryptocurrencies. Stay tuned!
Spatium Bitcoin MPC wallet is easy to use and free to download. It’s available on Android and iOS devices.
Try Spatium Feeless Bitcoin Wallet and the feature allowing you to pay a network fee in the currency you send instead of native chain tokens (currently available for USDC on Ethereum. More chains and tokens will be added soon).
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Keep a close eye on Spatium Feeless Bitcoin wallet which is building DeFi on Bitcoin and actively working toward the introduction of feeless crypto transactions and cheapest ever peer-to-peer crypto swaps without escrow.
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Bitcoin ordinals seem to be a new buzz coming to the Bitcoin blockchain. Let’s discuss why, what is that and understand how they can affect the development of the Bitcoin ecosystem. Moreover, it’s worth investigating how Ordinals on Bitcoin differ from NFT on Ethereum and Solana, for example.
What are Bitcoin Ordinals and how do they work?
Bitcoin ordinals were brought to the public by Casey Rodarmor, when he formulated his Ordinal theory back in January 2023. The main idea behind it is the following.
The smallest fraction of Bitcoin is satoshi, which is equal to 0.00000001 Bitcoin. All satoshi that make up Bitcoin are mined sequentially. That’s why they can be given numbers according to the order they are mined. This number is called an inscription. What Casey came up with is that these inscriptions can not only be numbers, they can be images, short videos, or GIFs. Through such a system of providing satoshi with inscribed graphic data, ordinals can obtain similar NFT functionality. Any number assigned for satoshi in the range between 0 and 2.1 trillion could be adapted for NFT realization.
As an example, let’s have a look at a dollar-quarter coin. One side of it always depicts George Washington. At the same time, the other side may feature various images, based on the year of the coin minting. That’s why we may speak about the same means of payment but with different inscriptions on one of its sides.
Thus, the Bitcoin blockchain which was designed only for financial operations, can grow and resemble a complicated structure obtaining extra functionality enabling the storage and transmission of non-fungible digital assets.
Ordinal NFTs VS Ethereum NFTs
The main difference between NFTs on Ethereum and Ordinals on Bitcoin is the way the data inscribed is stored. NFT on Eetherfum is created and stored on the blockchain with the help of the token standard ERC-721. This helps to find out and recognize an NFT across the Ethereum ecosystem. Together with the NFT, a metadata file is also created. This file has all the information about the NFT. The visual part of NFT only acts as a stamp, connected to the metadata file and identifying it. While a metadata file is embedded into the Ethereum blockchain, the image itself can be stored anywhere offline and that’s why it can be edited.
At the same time, Bitcoin Ordinals NFTs are attached to the piece of currency within the Bitcoin blockchain and this is the key difference from Ethereum NFTs.
Ordinal NFTs don’t need a special metadata file to describe what is that, concerning the artwork type and its value. The artwork itself is inscribed into the blockchain. It means that Bitcoin ordinals can not only store NFTs and help to track them over the blockchain ecosystem but also bring an extra level of security and immutability to Bitcoin NFTs. Such a high level of NFT protection is technically impossible on other blockchains.
Summing Up
With the growth of the Bitcoin blockchain ecosystem, more and more possibilities are opening for users. One of them is to prove the uniqueness and ownership of digital assets through the Ordinals.
Spatium is a crypto wallet that is building DeFi on Bitcoin and is actively investigating new possibilities for improving the Bitcoin blockchain ecosystem including the use of Ordinals to store and exchange NFTs on Bitcoin.
Visit our website for more information about new opportunities to send feeless crypto transactions, perform P2P swaps without the need to store the crypto of the blockchain you are sending to. Stay tuned and follow us on social networks.
Stay protected in web3 with Spatium Feeless Bitcoin Wallet. It’s easy to operate and securely to use. Spatium Feeless Bitcoin wallet is free to download. It’s available on Android and iOS devices. Visit our website to learn more about the wallet. Get it on your phone, test it, and enjoy your financial freedom!
Try Spatium Feeless Bitcoin Wallet and the feature allowing you to pay a network fee in the currency you send instead of native chain tokens (currently available for USDC on Ethereum. More chains and tokens will be added soon).
Keep a close eye on Spatium Feeless Bitcoin wallet which is building DeFi on Bitcoin and actively working toward the introduction of feeless crypto transactions and cheapest ever peer-to-peer crypto swaps without escrow.
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With the introduction of BRC-20, Bitcoin has obtained broader functionality outgrowing the mere medium of storage and exchange. BRC-20 tokens are a big step toward the adaptability of Bitcoin and Bitcoin blockchain for innovative blockchain ecosystems. It’s worth exploring what the BRC-20 standard is and how it can be useful.
What is BRC-20?
BRC-20 is an innovative fungible token standard allowing custom JSON scripts embedded directly into Bitcoin's smallest unit - satoshi. Such a mechanism enables BRC-20 tokens to be easily exchanged, traded, and used in applications built on the Bitcoin blockchain. Of course, the BRC-20 standard is in its experimental phase but with time it can be used to generate new layers of functionality, including dApp, DeFi, and NFT. etc, and tenfold expand the utility of the Bitcoin blockchain.
How does the BRC-20 standard differ from the ERC-20 standard?
At first glance, one may think that BRC-20 is similar to ERC-20 just for Bitcoin. But if we take into consideration that Bitcoin and Ethereum blockchains have different mechanisms of block verification and are built on different backgrounds, the standards should also differ.
The main three differences between BRC-20 and ERC-20 tokens are the following:
Minting and creation
ERC-20 tokens operation and creation relies on smart contracts and BRC-20 tokens feature JSON inscriptions on satoshis, the smallest Bitcoin fragment.
Platform type
BRC-20 tokens are not native to the Bitcoin blockchain but are used to operate. ERC-20 tokens are native to Ethereum and are used to operate.
Mode of operation
BRC-20 tokens operate on Bitcoin in parallel, making a network with its own settings. While all BRC-20 transactions can be accepted on the Bitcoin blockchain, some may be rejected if they don’t meet the conditions inscribed by the BRC-20 protocol.
Pros and cons of BRC-20 tokens
Pros
- BRC-20 tokens increase the utility of the Bitcoin blockchain;
- BRC-20 standard is compatible with Bitcoin, including its security standards and infrastructure;
- the simplicity of BRC-20 tokens creation, no complicated smart contracts involved;
- high level of security due to Bitcoin blockchain built-in properties;
- BRC-20 could bring early investors the opportunity to earn when the BRC-20 tokens gain utility and traction;
- BRC-20 standard has the potential to change the way the Bitcoin blockchain works.
Cons
- unlike the ERC-20 standard, BRC-20 lacks smart contract functionality which significantly limits the scope of applications;
- existence of Bitcoin blockchain limitations: slow transaction speed and low scalability;
- low level of interoperability with other blockchains;
- high level of technological complexity for those who are not very familiar with cryptocurrencies and blockchain.
- BRC-20 standard requires many resources to inscribe data onto satoshis, which could lead to network congestion and higher transaction costs.
Spatium crypto wallet is scaling Bitcoin on L1 and added BRC-20 support to Spatium Wallet App.
Get the Spatium Wallet App and enjoy how user-friendly and convenient it is. Protect your crypto assets with MPC cryptography and save on fees while sending transactions to blockchains. Moreover, soon Spatium will enable peer-to-peer crypto swaps when you don’t need to go to centralized exchanges to swap cryptocurrencies. Stay tuned!
Spatium Bitcoin MPC wallet is easy to use and free to download. It’s available on Android and iOS devices.
Try Spatium Feeless Bitcoin Wallet and the feature allowing you to pay a network fee in the currency you send instead of native chain tokens (currently available for USDC on Ethereum. More chains and tokens will be added soon).
Keep a close eye on Spatium Feeless Bitcoin wallet which is building DeFi on Bitcoin and actively working toward the introduction of feeless crypto transactions and cheapest ever peer-to-peer crypto swaps without escrow.
Follow us on social platforms: X, LinkedIn, Discord, and Telegram.
When talking about Bitcoin and other cryptocurrencies, there is one good question you may ask: how to get crypto? There are several ways to get cryptocurrencies.
One way is to register at a centralized exchange and buy crypto with fiat. Another way is to perform a crypto swap when both users exchange crypto directly. There is not much noise about swaps and the concept is still quite unfamiliar to the majority of web3 users. That’s why we would like to explore swapping in detail and share our findings.
What is a crypto swap?
Crypto swap is an option for web3 users to exchange their crypto with each other without paying extra commissions. Just to give an example, if you want to change BTC into ETH, then you have to go to the centralized or decentralized exchanges and perform multiple operations there. The crypto exchange logic is not straightforward. Firstly, the exchange will change BTC into fiat and take the commission for it. Secondly, it will change fiat into ETH and also take the commission, then it will send it to your account. In such a situation, a crypto swap doesn’t require fiat money as an intermediary, leading to fewer transaction fees applied.
Why consider crypto swapping?
Crypto swap is good while dealing with freshly minted crypto. For example, a new blockchain ecosystem has emerged and its token acts as an entry ticket to various services. Crypto swapping helps to make financially sound decisions and explore the opportunities provided by the new blockchain ecosystem. It’s an ideal option for web3 users who would like to support various projects.
There are thousands of coins and tokens in web3 and more keep emerging constantly as the market expands. Each of them presents a potential investment fortune. Sometimes the crypto is so new that it’s not listed yet at the crypto exchange. Using crypto swap instead of crypto exchange makes a huge difference in such a situation.
Let’s discuss one of the most common use cases for crypto swaps. You purchased crypto you believe will be profitable in the future. After a while, you realize that some other project seems to be more promising. You would like to sell the coins you have and buy new ones.
A conventional method of conversion is to go to the exchange and convert your coins into fiat and then fiat into other coins. Unfortunately, the extra steps you have to take, result in multiple transaction fees.
That’s why one of the most important functions of crypto swapping is to remove additional issues, reduce transaction fees, minimize commissions, and overall provide a more seamless process of getting the coins you require in no time.
How does crypto swap work?
Unlike trading at crypto exchanges, crypto swaps usually take place at crypto swap platforms: Changely, Swapy, Airswap, Shapeshift, etc. They perform the exchange of cryptocurrency assets for another coin or token of the same value. It’s a more convenient procedure for individuals if compared with going to exchanges.
The timing of end-to-end crypto swap differs from platform to platform. Usually, the process takes only a couple of steps and takes a few seconds. You have to choose the cryptocurrency you would like to swap, specify the amount, and proceed to confirmation.
Other than crypto swap platforms, swapping can be featured at crypto payment platforms and even crypto wallet apps.
Pluses and minuses of crypto swaps
Of course, as with any other type of activity on the blockchain, crypto swaps have their benefits and limitations.
Pluses of crypto swaps
- cryptocurrency swapping helps to bring more variety to the crypto you hold already;
- minimizes risks while bringing broader investment opportunities;
- increase crypto market efficiency;
- improve the interoperability among different blockchains;
- opens opportunities for big profits;
- improves market accessibility because crypto swaps eliminate intermediaries.
Minuses of crypto swaps
- crypto swaps are public that’s why there may be privacy concerns;
- blockchain technical bugs can cause crypto pair loss while swapping;
- swapped crypto of unknown origin could cause difficulties with later trade;
- high volatility of the market could bring losses from the swap.
Spatium Feeless Bitcoin Wallet recently released its MPC P2P Swaps (crypto-crypto) without escrow. Spatium P2P Swaps is currently in closed beta but already proved to be the cheapest swaps at the market.
Get the Spatium Wallet App and enjoy how user-friendly and convenient it is. Protect your crypto assets with MPC cryptography and save on fees while sending transactions to blockchains. Moreover, soon Spatium will enable peer-to-peer crypto swaps when you don’t need to go to centralized exchanges to swap cryptocurrencies. Stay tuned!
Spatium Bitcoin MPC wallet is easy to use and free to download. It’s available on Android and iOS devices.
Try Spatium Feeless Bitcoin Wallet and the feature allowing you to pay a network fee in the currency you send instead of native chain tokens (currently available for USDC on Ethereum. More chains and tokens will be added soon).
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Keep a close eye on Spatium Feeless Bitcoin wallet which is building DeFi on Bitcoin and actively working toward the introduction of feeless crypto transactions and cheapest ever peer-to-peer crypto swaps without escrow.
Follow us on social platforms: X, LinkedIn, Discord, and Telegram.
What is the Ethereum Blockchain?
Ethereum blockchain was introduced to the public in 2014 by Vitalik Buterin. The platform itself was launched in 2015. Ethereum is the first blockchain that went beyond being just a virtual payment means. That’s why it has grown now into a vast ecosystem hosting multiple blockchains and making ETH the second-largest cryptocurrency after Bitcoin.
Ethereum supports smart contracts by default, which makes it possible to launch various decentralized applications (dApps).
What are the Gas Fees on Ethereum?
Similar to the Bitcoin fees, Ethereum fees (gas) are paid for a transaction to be written in the Ethereum blockchain. Fees are paid in gwei, the smallest fraction of ETH, the Ethereum blockchain cryptocurrency. One gwei is 10-9 ETH. The gas fee is calculated based on the network congestion, supply, and demand.
Based on the complexity of the transaction and the amount of work required to be done by the validator gas limit also increases. Gas price is paid for the amount of work performed by validators. That’s why the transaction cost is calculated when the gas limit is multiplied by the gas price. Transaction fees may also include tips from users who would like to have higher priority in the transaction waiting queue.
Also, gas fees protect the Ethereum blockchain from being overloaded with unnecessary spamming transactions.
How Gas Fees are Calculated?
The gas fee or transaction fee is the ‘gas limit’ multiplied by ‘gas price by unit’. As an example, let’s imagine that the gas limit is 10,000 and the price for a unit is 100 gwei, a tiny denomination of ether (ETH). Using the provided formula, the gas fee will be 10,000*100 = 1,000,000 gwei or 0.001 ETH. To find out the average transaction fee, please, visit ycharts. As for May 2024, the average transaction fee fluctuates between $1 to $1.3. At the same time, with the network congestion increasing, the transaction fee will rise.
Why do Ethereum Gas Fees Fluctuate?
If you speak with someone who interacts with Ethereum blockchain the first thing they will say is to be smart about the timing when to send a transaction. Ethereum gas fees change based on the day of the week and the time of the day. The cheapest transactions are available on weekends and early mornings during the weekdays. Also, there are various gas fee calculators and gas fee trackers that you may use to calculate gas fees before sending transactions. Some wallets, like MetaMask, even have an inbuilt gas fee calculator. Other crypto wallets allow the gas fee to be set manually.
Sometimes, gas fees can grow out of proportion when the Ethereum network demand for transactions is higher than the bandwidth capacity of the blockchain. Usually, gas price spikes are connected with the launch of new projects on Ethereum, such as the ICO boom in 2017, the DeFi boom in 2020, or the CryptoKitties NFT project launch.
To get access to the Ethereum blockchain everyone requires a crypto wallet. One of the most secure and easy-to-operate crypto wallets is the Spatium Feeless Wallet. Our wallet is powered by MPC and works with all popular chains including Bitcoin, Ethereum, Solana, Polygon, Litecoin, etc.
It’s secure and easy to operate. Spatium wallet is a perfect match for new users who would like to join web3 and reap its benefits as soon as possible. Also, crypto-savvies will definitely find it convenient and cost-efficient due to our Feeless feature allowing users to pay network fees in the crypto they send, not in the native crypto of the blockchain (currently available for USDC on Ethereum. More chains and tokens will be added soon).
Spatium Feeless MPC wallet is free to download. It’s available on Android and iOS devices
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Every time you make a transaction on any blockchain including Bitcoin you have to pay a set amount of cryptocurrency for the transaction to go through. In Bitcoin it’s a small amount of Bitcoin cryptocurrency. Such parameters like the size of the transaction or network congestion affect the fee amount. Let’s explore what exactly you pay for when you interact with the Bitcoin blockchain?
What is the Bitcoin Transaction Fee?
The origin of fees on Bitcoin stems from protecting the network from overloading, when many users want to send transactions simultaneously. Right now, the Bitcoin fee is mostly used to pay validators or miners for their work, adding transactions to the block.
The fee amount can vary and many crypto wallets add a function of Bitcoin fee customization in the transaction settings.
Why can the Bitcoin Fee Amount Change?
As we have already stated, any Bitcoin transaction includes a small fee, which is transferred to Bitcoin blockchain validators. If you want validators or miners to add your transaction to the nearest block, which means less waiting time, then you attach higher fees to the transaction. If you are not in a hurry, and can wait longer for the transaction to be written into the block and be added to the Bitcoin blockchain, then you can provide a lower fee and save money. Anyway, try not to go below the average sum when you set up the amount for a transaction fee. If the fee is too low, then the transaction might get stuck in the system for hours if not days.
Even if such a scenario happens, don’t worry. Eventually, a transaction with very small fees after a long waiting time, can be either approved or canceled. If the transaction is canceled it means that the sum you want to send will get back to your crypto wallet account.
Also, there is an opportunity to check the status of your Bitcoin transaction. This is possible if you know your transaction ID. Provide your transaction ID here.
How Bitcoin fees are calculated?
Bitcoin fees are measured in satoshis/bytes. A satoshi is the smallest unit of a Bitcoin. One satoshi is 0.00000001 BTC (Bitcoin). The size of the transaction is measured in bytes. The more complicated a transaction is, the more bytes it involves, that’s why it will be more expensive. On average, the standard transaction size is around 230 bytes, which means that the fee for such a transaction will fluctuate from 1,400-2,700 satoshi.
As an example, in August 2022, the average Bitcoin transaction fee was around $1 which is 0.000044 BTC, now, in March 2024, it is around $8 dollars, which is 0.00011 BTC. In April, 2021, the transaction peak rose over $60 per transaction.
Conclusion
Every action on Bitcoin blockchain requires fees. They are charged based on the size of the transaction and how quickly you would like it to be added to the Bitcoin blockchain. Also, there are various service fees, if you interact with Bitcoin cryptocurrency through cryptocurrency exchanges or any other service providers. Each of these services charge you extra fees for handling your transaction.
The Spatium crypto wallet team is building a fee-saving ecosystem around Bitcoin, which is called to minimize the transaction fees and maximize your profit.
Spatium Feeless Bitcoin crypto wallet is a self-custodial wallet powered by MPC technology. It’s secure and easy to operate. Spatium wallet is a perfect match for new users who would like to join web3 and reap its benefits as soon as possible. Also, crypto-savvies will definitely find it convenient and cost-efficient due to our Feeless feature allowing users to pay network fees in the crypto they send, not in the native crypto of the blockchain (currently available for USDC on Ethereum. More chains and tokens will be added soon).
Spatium Bitcoin MPC wallet is free to download. It’s available on Android and iOS devices.
Subscribe to our social network accounts and stay on the curve of all the buzz around Spatium!
Follow us on social platforms: X, LinkedIn, Discord, and Telegram.
