How to Avoid High Bitcoin & Cryptocurrency Transaction Fees

How to Avoid High Bitcoin & Cryptocurrency Transaction Fees

If you are sending Bitcoin or any other cryptocurrency to someone, you are required to pay a transaction fee. This fee is paid to miners for including your transaction in the blockchain. It is possible to send Bitcoin or any cryptocurrency without paying any fees. If you send Bitcoin without a fee, it may take a long time for a miner to pick up your transaction and include that in a block. In some cases, your transaction may never be included in a block. In that case, your Bitcoin will be returned to you.

Some of the bitcoin wallets allow you to allocate a fee for every transaction. The lowest fee you can allocate is 0.00000001 Bitcoin. That is 1 Satoshi. If you want to send Bitcoin to someone fast, you must allocate a higher fee. Since miners want to get the highest reward for mining, they include transactions with the highest fees first.

The majority of Bitcoin wallets don’t allow you to set your own fee. These wallets track the changes in the Bitcoin network and adjust fees accordingly. At times where there is an increase in the number of transactions, the network fee allocated by these wallets increases exuberantly. This is because of the artificial limit that was placed into the bitcoin code by the developers. The maximum amount of data allowed in one block is 1 MB. These wallets set higher fees to get your transaction added quickly.

If you are new to bitcoin, this can be very convenient, but not very cheap. If you want to send Bitcoin to someone with low fees, you must first have a Bitcoin wallet that allows you to set your own fee. If you use a wallet that doesn’t have this feature, you can still send Bitcoin with low fees. However, for this method to work, you would need to obtain your Bitcoin private key. Any decent Bitcoin wallet gives access to your private key. You shouldn’t use a wallet that doesn’t give access to the private key in the first place. If you own your private key, you own your funds. Do not ever share this key with anyone.

How to Send Bitcoin with Low Fees

So, the first step is to obtain your Bitcoin private key from the Bitcoin wallet you use.

The next step is to create a wallet at Blockchain.com or signup/install any wallet that allows you to set your own transaction fee. This wallet must also support the feature of importing private keys. In this example, we will use the Blockchain.com wallet.

After creating a wallet at Blockchain.com, click on settings > wallet & addresses > import Bitcoin address:

Import Bitcoin address Blockchain wallet

Check “Existing address generated outside this wallet”. Paste your private key and click import.

Now, all your bitcoin balance from your old wallet is available on blockchain wallet. Whenever you want to send Bitcoin to someone, you can use the Blockchain wallet instead. You can easily set your own transaction fee with this wallet:

Customize network fee Blockchain wallet

How to Send Ethereum and ERC-20 Tokens with Low Fees

If you want to send Ethereum or any Ethereum based token with low fees, there is a way to do that too. As you know, Ethereum and all tokens on the Ethereum blockchain require Ethereum Gas to execute operations. Ethereum Gas measures the computational effort to execute certain operations in the Ethereum platform.

You can set any gas price you want. It is up to the miners to decide if they are going to include your transaction in the blockchain or not. Higher the gas price, more miners will want to include your transaction.

If you want to send Ethereum or any Ethereum based token with low fees, you can do that by setting a low gas price. However, the majority of Ethereum wallets don’t have the option to adjust gas price and gas limit. These wallets set their own gas limit and price for every transaction you conduct.

You can get around this by using a wallet like MyEtherWallet. MyEtherWallet is an open-source, client-side wallet for Ethereum and Ethereum based tokens. This wallet allows you to set your own gas price and gas limit whenever you are transacting.

All you have to do is import your Ethereum private key to MyEtherWallet.

MyEtherWallet Private Key Import

To send Ethereum and other tokens with low fees, what is most important to adjust is the gas price. Setting a low gas limit won’t help you much. Keep in mind that if your gas price or gas limit is too low, your transaction may not be included in a block. You can learn more about the gas price and limit here.

Adjust Gas Price and Limit MyEtherWallet

How to Withdraw from a Cryptocurrency Exchange With Low Fees

If your cryptocurrency is stored on a cryptocurrency exchange, chances are you do not have access to your private keys. Because of this, you can’t import your private key to a wallet like Blockchain Wallet or MyEtherWallet to adjust the transaction fee. All exchanges have minimum and maximum withdrawal limits and a fixed amount of fee that you must pay when withdrawing. Some cryptocurrency exchanges charge unnecessarily high network fees.

Fortunately, there are a handful of cryptocurrency exchanges that do charge fair transaction fees from customers. These are some of the exchanges with low fees:

However, there is a way to lower your transaction fees even further. For example, if you are withdrawing Bitcoin from Binance exchange, your transaction fee can be high as 0.0004 BTC. But, if you are withdrawing Litecoin, your transaction fee is 0.001 LTC. That is significantly lower than Bitcoin’s fee in terms of dollars.

So all you have to do is convert your Bitcoin to Litecoin and then withdraw Litecoin. You mustn’t withdraw Litecoin to just any wallet. You must withdraw Litecoin to a service like Changelly. Changelly allows you to swap crypto with crypto, with very low fees. Start a trade at Changelly and choose to swap Litecoin with Bitcoin. Changelly will then give a Litecoin address and you will then be asked to provide a Bitcoin destination address. Withdraw Litecoin from the exchange to the Litecoin address given by Changelly and wait for them to convert Litecoin to Bitcoin and send it to your Bitcoin wallet.

By using Changelly in conjunction with a cryptocurrency exchange can lower your fees significantly. Changelly supports swapping of over 140 coins. Depending on the cryptocurrency exchange, you must select a coin that has a low transaction fee and then swap it with Changelly.

If you are withdrawing a small amount of coin, then Changelly may not be the right solution. That is because Changelly has a minimum limit for every coin.

In that case, you can use a service like BlockTraders. This service supports swapping of very small amount of coin. However, BlockTraders only support a limited number of coins. All major cryptocurrency is still supported here. The transaction fee charged by BlockTraders is negligible.

Conclusion

The best way to send cryptocurrency to someone with low fees is to set your own transaction fee. Wallets like BlockchainWallet and MyEtherWallet allow you to do just that. If you are withdrawing cryptocurrency from an exchange, you can use services like Changelly or BlockTraders to lower the fee.