Every time you send any cryptocurrency, from your address to another, you incur a Network Transaction fee, also referred to as a Network fee. Making trades on exchanges also require fees for every buy or sell transaction.
The actual fee you pay will vary according to the network you use. For example, a Bitcoin transaction will have a different fee in comparison to transactions placed on the Bitcoin Cash, Ethereum or Litecoin network. There are even tokens that require a secondary or
“gas” token to pay the network fees.
Mining is the process through which cryptocurrency transactions are gathered, verified, and recorded into a digital ledger known as the blockchain.
For proof of work in blockchains like Bitcoin and Ethereum, the miners get block rewards.
‘Block reward’ refers to the cryptocurrency rewarded to a miner when they successfully validate a new block. A block is composed of transactions that are already verified or confirmed by the miners, and they are chained together to form what we call a blockchain.
Proof-of-Stake systems usually use transaction fees as a reward. When a validator gets chosen to forge the next block, it will check if the transactions in the block are valid, sign the block and add it to the blockchain. As a reward, the validator receives the transaction fees that are associated with the transactions in the block.
Fees can fluctuate depending on market demand and network capacity. The amount you pay per transaction is determined by how much you’re willing to spend. The more you pay the faster your transaction is processed. For those who are paying less, their transactions are set aside until the miners do not see higher priority transactions.
Determining fees can be a bit of a challenge, due to the way Bitcoin works. The price you pay depends on a number of factors including the size in kilobytes i.e the amount of data that makes up the transaction. That’s why SegWit sends are generally cheaper: because you’re transmitting less data over the network.
Here are some sites that can help with calculating network fees:
https://estimatefee.com – a Bitcoin Fee Calculator
https://ethgasstation.info – site for tracking Gas fees on Ethereum Network
https://txstreet.com/v/btc-eth – live transaction visualizer featuring BTC, ETH and BCH.
Since miners collect gas fees paid by the sender, they usually look for transactions with the highest gas price to approve first. That is why lower gas price transactions take longer to process. In a pool of many transactions, some transactions with the lowest gas prices never get picked up – miners are not willing to process them. It results in them getting “stuck” in a pending status.
Note:
Pending transactions can also appear on your wallet, but upon checking the details it does not show anything on the blockchain explorer 2.0k
● Best practices:
Write it down on a piece of paper and store it in a safe and secure place. If you are looking for something more durable then paper, we recommend you to use CRYPTOTAG.
● Store it inside a Password Manager. If you aren’t already using one, you should probably do so anyway. Your recovery phrase will be stored inside an encrypted database either locally on the user’s device or remotely through an online cloud service. Solutions like Lastpass, 1Password or KeePassXC are a safe choice.
● Note-taking Apps like Notes for iOS, Samsung Notes for Android or OneNote let you create notes protected with a password. If you don’t want to use a Password manager, storing it inside a password protected (and encrypted) note also works.
● Redundancy is important!
● Store your recovery phrase in different places to have a backup of your backup. An accident may destroy one backup, but is unlikely to affect the other if they are in different locations.
A Multi-chain decentralised wallet, you hold the keys to your cryptocurrency wallet.
A user controlled wallet, only the user has control over their funds.
Has access to DApps unlike centralised wallets.
