Fees or Commissions

Fees are essentially a sum of money or cryptocurrency withheld by a service provider as payment for providing a service.

They are often charged by crypto exchange platforms when buying or selling cryptocurrencies: in this case, fees represent the cost of trading.

There are also online electronic wallets and microwallets that, although free to sign up for, charge a fee for both deposits and transfers. In this case, fees are the only source of revenue for these online wallets, since the service is generally provided free of charge.

Fees are also charged for simple electronic currency transactions. These are known as blockchain fees or miner fees and are essentially transaction fees paid by users who carry out transactions. Paying this fee serves as a reward for cryptocurrency miners, who contribute to maintaining the blockchain and are responsible for confirming transactions by mining the block on the network in which they are included. The higher the fee paid by the sender, the faster the transaction will be confirmed by miners: this fee therefore helps speed up cryptocurrency transfers, which may otherwise be slowed down by heavy network congestion. In 2017, for example, the fee for a transaction on the Bitcoin network was around 300 satoshis/byte, a figure that is now lower thanks to the adoption of the Lightning Network.

Finally, some faucets themselves charge a percentage-based fee on the amount requested when making a withdrawal. Fortunately, very few faucets charge these fees and, in any case, they almost never require more than 10% of the total withdrawal amount. Since these are cryptocurrency tokens given away to users, they do not represent a real cost to the user.