Bought Your First Bitcoin Or Ether? Brace For The Fees
Bought Your First Bitcoin or Ether? Brace for the Fees Dec 18, 2017 at 11:30 UTC|UpdatedDec 19, 2017 at 13:03 UTC I sent $25 of Bitcoin from one address (in Coinbase) to another (Kraken). -- Kristian Freeman (@imkmf) December 8, 2017 Ready to send your first bitcoin?That will be $26 please... Sure, that's on the high end of what you might pay to use the bitcoin blockchain today, but if you're new to the world of cryptocurrencies (and haven't invested that much), we understand seeing such a sky-high sum might be a shock. (Sorry, Kristian!) Despite what you might have heard about the "money of the future," the fact is bitcoin (and other cryptocurrencies) are both expensive - and experimental - today. But while this might not be what you're used to (or even what you signed up for when purchasing), looking at the reasons behind blockchain costs can help you understand the technology, its weaknesses and where the ecosystem needs more dedicated minds to improve. OK, so what's with fees in the first place? To start, you're probably thinking this money is all going somewhere. And it is, just not a single place. When you send a cryptocurrency transaction, you're paying for it to be included on the protocol's blockchain, which you can think of as something an official record of every token on the network ever spent (whether it's bitcoin, ether or something more exotic). Rather than holding this at a bank or a credit card firm, this ledger is distributed. This means that should any one computer (or group of computers) go down, the network still has a copy showing that you own your asset. The bad news is you have to pay all those computers to process it. Here, we'll introduce you to the first new person on our journey, the miner (or validator, depending on your network). You don't Continue reading >>
Ethereum's High Fees Have Become An Issue For Applications And Exchanges | Btcmanager
Earlier this week, Bittrex, the fourth largest cryptocurrency exchange in the global market with a $2.7 billion daily trading volume, suspended the creation of Ethereum deposit addresses due to increasing fees and network congestion. Due to incredibly high gas prices, were preventing new ETH and asset deposit addresses from being created. Existing deposit addresses will work as normal, Bittrex wrote . According to Etherscan, the Ethereum network is currently processing more than 1.3 million transactions on a daily basis. It has a daily transaction volume that is larger that of all cryptocurrencies in the global market combined, including bitcoin. Although Ethereum is a scalable blockchain network with sufficient on-chain scaling and innovative second-layer scaling solutions such as Plasma and Sharding in development, it is struggling to handle the massive increase in demand for ether. For a blockchain network, a daily transaction volume of more than one million transactions is difficult to handle, given that such a volume is unprecedented. Bitcoin , the most valuable cryptocurrency in the market, is only processing just over 400,000 transactions per day, less than 40 percent of the Ethereum network. Structurally, Ethereum was developed to handle more transactions than Bitcoin, as it has to operate as the base protocol for large-scale and commercial decentralized applications. The rise of popularity in decentralized applications like CryptoKitties , EtherDelta, and 0x has led to a congestion of the Ethereum network. The developers of Bankex, who introduced the first practical implementation of Ethereum co-founder Vitalik Buterins off-chain scaling solution Plasma, wrote in a blog post that decentralized applications that require many thousands of transactions to execute Continue reading >>
Ethereum Price Surges, But Congestion And Transaction Fees Reduce
Ethereum price surges, but congestion and transaction fees reduce Ethereum price surge continues with the altcoin trading at around $477 as of this writing and while thats good news, reduction in ethereum network congestion as well as transaction fees has also brought about a positive wave for the cryptocurrency. As of this writing, ethereums transaction fees have fallen down to less than 10 cent from a recent high of more than 50 cent. Network congestion has reduced by more than 50 per cent at around 14,000 down from 30,000. One of the reasons behind the reduction in transaction numbers and fees is miners raising ethereums gas limit (blocksize) by 1 million computations from 6.7 million to 7.7 million. Unlike in bitcoin, ethereums blocksize is a soft limit, with a simple majority of miners deciding whether it should increase or decrease. Despite opposition from Ethermine other miners increased the gas limit thereby providing some temporary relief and solving what could have been a a very unappealing situation. Ethereum may now continue operating smoothly while handling more than 700,000 transactions a day. The number of transactions per day will definitely increase with ethereum gaining momentum both in terms of popularity and pricing. For bitcoin, studies have suggested that 4MB is safe and considering the continued advance of technology, 8MB may be pretty safe. Its unclear whether the same applies to ethereum, which has a current blocksize of around 0.8MB of data for every 10 minutes. If eths blocksize can gradually be increased 4x in line with demand, then we would be looking at almost 3 million transactions a day. That should hopefully be enough for the kitties, and more importantly, it might hopefully be sufficient until the more long term solutions, such as shar Continue reading >>
Network Transaction Fees Crypto Voices
Green area: Total transaction fees per day, in US$; Blue line: Average transaction fee, in US$. Green area: Total transaction fees per day, in coins; Blue line: Average transaction fee, per byte of data accepted into each block, in coin's smallest denomination (except in Ethereum's case). Note that Ethereum's total network "transaction fees" are calculated by a two-step process. First, you need to understand the "gas"price. This is an extremely small figure, intended to be decoupled from ether's market price. Here we are measuring it in szabos, which amounts to 0.000001 ether per 1 szabo. Ethereum's denominations actually go much smaller than this, down to something called wei. One ether would amount to 1e18 wei; or a 1 with 18 zeros behind it. In any event, after the average gas price is understood, one would need to multiply this price by the total amount of gas units purchased in each block. Users must purchase any number of "gas" units to run different computations and contracts on Ethereum's network. The market history of both these figures is graphed below. Here, we can also see the dynamic limit that Ethereum places on gas units which can be purchased in each block. This limit is set dynamically by miners. Both are reflected in the right axis. As discussed in the network cost / block reward section, the "block reward"is essentially a revenue item for miners, and a cost item for the rest of us. Remember, it usually compromises both inflation (newly "mined" coins) and some form of transaction fees. This section isolates and graphs transaction fees only. Typically, miners choose which transactions they want to include in each block, based on how high their transaction fees are. The higher the transaction fee, the more likely your transaction is to be included and e Continue reading >>
Ethereum Transaction Fee - Crypto Mining Blog
All About BTC, LTC, ETH mining as well as other alternative crypto currencies How To Save on Taxes and Time When Transferring Ethereum (ETH) When you are transferring a crypto currency from one address to another you need to pay a fee for the transfer to happen. With crypto coins like Bitcoin the fee is paid depending on the amount of the data that need to be included in a block for the transaction to happen, it is a single fee per Kilobyte of data that you have control over. Increasing the fee can result in faster inclusion in a block and faster processing of your transaction to get included in the Blockchain and the coins to move to the new address. Decreasing the fee from the recommended amount will usually result in slower confirmation time, but if the fee is too little your transfer may actually never happen. If the fee is too low and the transaction is taking too long to confirm you might try to Cancel Unconfirmed Bitcoin Transactions if you have used a local wallet like Bitcoin Core for example. With Ethereum (ETH) the whole thing works a bit differently, though the general principle of paying a fee for transactions is pretty much the same. When you send Ethereum, transfer tokens, interact with smart contracts and so on you need to pay a fee in Gas, though the actual fee is paid in ETH anyway. With Ethereum you always pay a fee, even if your interaction with the blockchain is not successful or if it is successful. Here is an example, if you send some Ethereum coins to a smart contract and doing so with not enough Gas, the coins will not be sent, but you still will have to pay the fee and it will be deducted from your balance. With Bitcoin for comparison an unsuccessful transaction will not result in you still paying the transaction fees. The total TX (transactio Continue reading >>
Ethereum Gas And Transaction Fees Explained!
Ethereum Gas and Transaction Fees Explained! What is mining and whats the difference between PoW and PoS mining? Basic knowledge of programming terms (variables, loops) might also come in handy. When sending a Bitcoin transaction, its fee is proportionate to its size. The more inputs and outputs , the more expensive it is. Add to that the factor of pending transactions , and transaction fees can skyrocket based on those two factors alone. With Ethereum, given that were talking about a programming language within the protocol, its possible to be very computationally demanding with very little text or code (something which would be very cheap in the BTC-verse). Lets look at this loop for example: This loop means "for as long as i is smaller than 1000, increase it by 1 and then sum up i and j and write the result into j, then do it all again." This loop will execute 1000 times if i is 0 or more if it's a negative number. To pay for this computational cost in a fair way - since it has to be executed on all miners' machines at once and they spend their resources and time on it - the concept of gas was introduced. Gas is used to pay for the execution of these so called smart contracts (Ethereum programs) inside the EVM. For example, i + j above is a summation operation which costs 3 gas every time it's executed, so 3000 gas if executed 1000 times. To explain gas properly, let's first cover the EVM. EVM stands for Ethereum Virtual Machine. But what is a virtual machine anyway? A virtual machine is software running on a specific computer which contains another operating system completely encapsulated inside the main one. A virtual machine allows you to, for example, run Windows inside of Linux, Linux inside of Windows, Windows on OS X like in the image below, or any other comb Continue reading >>
What Is Gas? Gas & Transaction Fees | Myetherwallet Help & Support
When you hear gas, the person is either talking about: The total cost of a transaction (the "TX fee") is the Gas Limit * Gas Price. Typically, if someone just says "Gas", they are talking about the "Gas Limit". You can think of the gas limit like the amount of liters/gallons/units of gas for a car. You can think of the gas price as the cost of that liter/gallon/unit of gas. With a car, it's $2.50 (price) per gallon (unit). With Ethereum, it's 20 GWEI (price) per gas (unit). 21000 units of gas at 20 GWEI = 0.00042 ETH. Therefore, the total TX fee will be 0.00042 Ether. Sending tokens will typically take ~50000 gas to ~100000 gas, so the total TX fee increases to 0.001 ETH - 0.002 ETH. You can use our tool to calculate GWEI <-> WEI <-> USD here , which can be helpful when you want to know your TX fee in ETH, rather than GWEI. The gas limit is called the limit because it's the maximum amount of units of gas you are willing to spend on a transaction. This avoids situations where there is an error somewhere in the contract, and you spend 1 ETH....10 ETH....1000 ETH..... going in circles but arriving no where. However, the units of gas necessary for a transaction are already defined by how much code is executed on the blockchain. If you do not want to spend as much on gas, lowering the gas limit won't help much. You must include enough gas to cover the computational resources you use or your transaction will fail due to an Out of Gas Error. All unused gas is refunded to you at the end of a transaction. So if you go to MyEtherWallet, send 1 ETH to our donation address ( ? ), and use a gas limit of 400000 you will receive 400000 - 21000* back. However, if you were sending 1 ETH to a contract and your transaction to the contract fails (say, the Token Creation Period is already Continue reading >>
Big Transaction Fees Are A Problem For Bitcoin But There Could Be A Solution
Bitcoin transaction fees are proving to be profitable for so-called bitcoin "miners". Miners work out complex cryptographic puzzles to add transactions to the blockchain, a decentralized record of all bitcoin transactions. They are paid in bitcoin in return for their services. On Monday, the total value of all transaction fees paid to miners hit an astronomical sum above $11 million on that one day, according to Blockchain.com data. A debate has been brewing among the bitcoin community surrounding transaction times and fees. Right now it takes an average time of 78 minutes to confirm a bitcoin transaction, according to Blockchain.com. But on Sunday the average time was as high as 1,188 minutes. Slow transaction speeds and fees has led to a number of splits in the original blockchain. In August, the blockchain was forced to split in two a phenomenon known as "hard fork." This led to the creation of a bitcoin spinoff called bitcoin cash. Another fork occurred in October , spawning yet another digital asset called bitcoin gold. These bitcoin offshoots have spawned because some within the bitcoin community believe that the size of blocks records of transactions on the network should be increased. A proposed update known as SegWit2x would have increased the block size from one to two megabytes, but this was dropped last month. Separating bitcoin from its altcoin rivals The boss of blockchain firm Ripple, whose digital currency XRP is the fourth-largest by market value, is skeptical about the use of bitcoin for payments and transfers. "I don't think bitcoin is well-positioned to solve the payments problem," Ripple's CEO Brad Garlinghouse told CNBC earlier this year. Garlinghouse said that his firm's cryptocurrency was "enabling transactions in seconds," adding that the cost Continue reading >>
What Are The Fees For Transferring Money On The Ethereum Network?
What are the fees for transferring money on the Ethereum Network? Fees for transfer on the Ethereum network are paid for using gas, which itself is bought using Ether. There is a standard fee of 21,000 gas for a simple value transfer (buying ETH with fiat currency, buying ETH with BTC or other crypto, or sending ETH to another address). Gas is also used for executing smart contracts, with set gas values for each type of computation or data storage, but that goes beyond what youre asking I believe. While the amount of gas for a value transfer is set at 21,000 gas, you can send more gas to get a faster transaction, and any gas not spent on the transaction will be refunded to you. The price of gas is variable and depends on network congestion and agreement among miners on what they want to charge. That said, the price of gas has been quite stable since March 2016, and has in fact declined somewhat in the past several weeks. With all of that said, the current cost for a value transfer is $0.382 or 0.00088 ETH. You can see current gas price and many other stats regarding the Ethereum network here: ETH Gas Station Continue reading >>
Cost Per Transaction Inethereum
Recently, one of the economists at CME Group published a very curious article: CLARIFICATION: I should have emphasised that cost of transaction used in the article mentioned, and as referred below, is different from transaction fee. Cost of transaction is how much network is paying miners to process one transaction, on average. That includes block rewards, uncle rewards, and transaction fees. One of the interesting points was the observation that in the past (though we only have very few data points), the cost per transaction (total mining revenue divided by the number of transactions) rising could be a sign of a price collapse. He used a chart available at blockchain.info to illustrate: What about Ethereum? I pulled some data from Etherscan: and wrote this little Python script to analyse: Continue reading >>
Ethereum On Its Knees, Fees Rise To 40 Cent, 25,000 Transactions Stuck
Ethereum on Its Knees, Fees Rise to 40 Cent, 25,000 Transactions Stuck The ethereum network is currently fully congested with 25,000 transactions stuck after hitting a ceiling of 700,000 transactions per day in the past three days. Fees have now risen to their highest level ever, at 40 cent per transaction, double the amount Vitalik Buterin, ethereums inventor, ever imagined. He says : I never would have imagined that fees would ever be allowed to rise above $0.20. They have, raising questions as to why what we are currently seeing was allowed to pass. One explanation might be that few thought the ceiling would be at 700k, with previous numbers estimating capacity at 1.3 million and even as high as 2 million. The sudden congestion, therefore, has come as a surprise, at least to us, and even more surprising was miners stating they are not raising capacity due to very high uncle rates, to the agreement of at least one ethereum developer . It seems ethereum has neglected somewhat simple, low level, optimizations, in favor of more comprehensive solutions such as Proof of Stake and Sharding . The latter especially addresses scalability very thoroughly, raising capacity by orders of magnitude, but that will take some time. While Proof of Stake might optimistically be ready by summer, but there are potential short term solutions to increase connectivity between miners, thus lowering uncle rates. As the urgency of the matter has now probably increased to top priority, such solutions may be ready in weeks, but it is unclear whether, until then, miners will really allow this situation to continue. Unlike in bitcoin, ethereum miners are actually rewarded for orphaned blocks (uncles). A temporary percentage increase, therefore, might perhaps not matter. So some miners might decide Continue reading >>
How Do Ethereum's Transaction Fees Compare To Bitcoin?
How do Ethereum's transaction fees compare to Bitcoin? Ethereum has faster transactions than the 10 minutes of standard bitcoin protocol.How do the transaction fees compare at the moment if you translate the price into a comparable currency like dollars or euros?Long-term how are they likely to compare? etherdelta is charging 58gwei ($6) per transaction right now... is that legit? valuedCustomer Dec 9 at 5:22 Every computation on the Ethereum network cost gas, so do value transfers like on the bitcoin blockchain. Every computational step, or OPCODE requires a specific amount of gas (which is hardcoded). You pay for gas using ether. To determine the fee you pay you calculate: For example a simple value transfer cost 21000 gas, the current gas price is dynamically set by users and miners and is currently ~0.00000005 ether, so the value transaction would cost ~0.00105 ether or $0.001 to $0.002 USD at current prices. Current BTC transaction fees vary anywhere from $0.01 to $0.09 USD Users can set the gas price they are willing to pay and and miners can set the minimum gas price they are willing to accept. This creates a dynamic market, which allows ethers "fee" to be dynamic and adopt to ether price swings. I don't think this answer tells me whether I can expect the fees payed on ethereum to be higher or lower than in bitcoin when converted into dollars. Christian Jan 23 '16 at 21:57 In short, in Ethereum the fees are paid in gas and calculated based on contract code execution complexity, in bitcoin the're based solely on transaction size. See the these Ethereum gas fees tables ( table1 , table2 ) for the complete gas costs for executing contract code. The fee for a value transfer is 21000 gas, you need to check the current gas price on the Ethereum Stats and then multiply Continue reading >>
$44 Million In Ethereum Moved With $0.13 Fee, How Can Bitcoin Reach Similar Scalability?
$44 Million in Ethereum Moved With $0.13 Fee, How Can Bitcoin Reach Similar Scalability? Bitcoin fees have significantly decreased over the past few months, especially since the lock-in of the Bitcoin Core development teams scaling solution and transaction malleability fix Segregated Witness (SegWit) and the proposal of SegWit2x. Leading bitcoin wallet platforms including Blockchain, the second largest non-custodial bitcoin wallet application behind Coinbase, currently recommends a $0.88 fee for a median-sized transaction and a $1.1 fee for urgent transactions that need to be confirmed by miners within 60 minutes. In contrast to the median fee of around $3 in June, bitcoin transaction fees have substantially decreased. Prominent experts and analysts including Nick Szabo revealed that a series of spam attacks clogged the bitcoin blockchain in 2016, which ultimately led the bitcoin mempool, the holding area for unconfirmed transactions, to bloat and transaction fees to rise at a rapid rate. The debate on whether transaction spam attacks continued throughout this year is still ongoing, however, almost immediately after the industry agreed to activate SegWit through BIP 91, bitcoin fees abruptly dropped.Oxt Developer, Laurent recently speculated that spam attacks on the network bloated and clogged the blockchain for at least 18 months: Considering that the published elements are the result of an exploratory analysis, I would say that Im 95% confident. 100% confidence will require an in-depth analysis which is currently outside what my financial resources allow me to do. Today, bitcoin transaction fees are significantly lower. Users can easily process median-sized transactions with a fee less than $1, which was not possible three months ago. More importantly, with SegWit, w Continue reading >>
Coinbase | Coinbase Pricing & Fees Disclosures
In general, Coinbase does not charge a fee to use our Hosted Digital Currency Wallet service. Transfers of virtual currency to an address off the Coinbase platform may incur network transaction fees, such as bitcoin miners fees, which Coinbase may pass through to you. Any such transfer fees will be disclosed to you at the time of the transaction. Your exchange rate for buying or selling digital currency through our Conversion Service is calculated as the market rate of the digital currency on Coinbases GDAX platform, plus a spread between 25 to 100 basis points determined by the size of your transaction, market volatility and length of time using Coinbase ("Exchange Rate"). In rare circumstances, the market rate from GDAX may not be available due to outages or scheduled maintenance. In order to provide you with uninterrupted services at such time, we may derive market pricing data from unaffiliated digital currency exchanges. Exchange rates quoted in these circumstances are subject to spread exceeding 100 basis points. The final exchange rate will be quoted to you before you complete your transaction. We charge fees (Conversion Fees) to use the Conversion Service, which vary based on your location, payment method, and other circumstances. In some cases we may charge an additional fee on transfers to and from your bank account. We will always notify you of Conversion Fees and any other service fees that apply to each transaction in the aggregate, in two instances: (1) immediately before you confirm each transaction and (2) in the receipt we issue to you immediately after each transaction has processed. Unless otherwise disclosed to you at the time of your transaction, the Conversion Fees you pay is calculated by one of two methods: Continue reading >>
Analyst: Suspicious Bitcoin Mempool Activity, Transaction Fees Spike To $16
Analyst: Suspicious Bitcoin Mempool Activity, Transaction Fees Spike to $16 With the daily trading volume of Bitcoin at an all-time high, the mempool of the Bitcoin Blockchain has started to expand again. With the daily trading volume of Bitcoin at an all-time high, at around $20 bln across major regions, the mempool of the Bitcoin Blockchain has started to expand again. Bitcoin mempool size spikes, transaction fees increase In Bitcoin, the mempool operates as a holding area for unconfirmed transactions. Payments made by users await in the mempool until miners arrive to confirm the transactions. The size of the Bitcoin mempool, which remains at around 79 mln bytes at the time of reporting, represents the aggregate size of transactions waiting to be confirmed. If the size of the Bitcoin mempool is high, transaction fees recommended by wallet platforms such as Blockchain, Coinbase and Trezor surge and failing to attach high fees could result in a transaction being delayed for many days, if the Bitcoin mempool does not clear. On Dec. 7, the size of the Bitcoin mempool reached 120 mln bytes, spiking by more than two-fold within a 24-hour span. As a consequence, transaction fees of Bitcoin recommended by wallets surged up to $30, depending on the size of the transaction and the number of inputs or outputs. Bitcoin Fees, a Bitcoin fee predicting application on Earn.com, previously known as 21 Inc, currently recommends a fee of 450 satoshis per byte for median-size transactions, resulting in a fee of 101,700 satoshis. In US dollars, the recommended fee of Bitcoin Fees for median-size transactions is $16. Suspicious behavior in the Bitcoin mempool Nic Carter, an experienced Bitcoin analyst and researcher, stated that the abrupt surge in the size of the Bitcoin mempool is suspi Continue reading >>