Newcomers to crypto: a quick insight into “hidden” fees

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Newcomers to crypto: a quick insight into “hidden” fees

I see a number of newer investors posting a lot about suddenly missing crypto or crypto that was stolen by (insert any Exchange) during various transactions. Often it turns out that there wasn’t any missing funds but rather a discovery that there is a (high) cost to execute transactions on ERC20 (Ethereum’s standard utilized on their blockchain). It is important to emphasize: these costs aren't specific to Coinbase/Binance/Bittrex/Kraken/Exodus at all. This is just how the ERC20 blockchain works, and it’s especially expensive now with all the crypto new-comers helping to increase the already high demand on ERC20.

An important note: the cost is the same no matter the amount of the transfer. Think of ERC20 fees like being a bus driver: whether you have a lot passengers or only 1, the relative cost of driving your bus around will be constant; that is: a transaction for $1,000,000,000 or just $1 costs the same exact amount in “gas” fees.

So when is a good time that fees won’t be as high? For reference keep an eye on this site:

There’s been such high demand that 50 (my ideal number) or even sub-100 gwei rarely happens. Eventually you might luck out on finding a low demand time in the middle of the night or, if you’re patient, ETH2.0 will also help reduce these fees when it’s fully live.

If nothing else, hold: your small amount of crypto will often appreciate in value so you’ll have more leverage by the time fees are more affordable. Hopefully this helps a few people! Few free to ask any questions in the comments and I’ll answer as best I can.

submitted by /u/420friendlyredbeard
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