What fees are charged in the cryptocurrency trading?

Introduction

There is an increasing interest in investing in cryptocurrency among investors all over the world. Trading is done through cryptocurrency exchange in this. Cryptocurrencies are bought and sold on this exchange based on the current market value. Where their price is determined according to the demand and supply. The way shares are bought and sold on a stock exchange, you can buy cryptocurrency on a cryptocurrency exchange at a fixed price and sell it when you get a profit. Like the stock exchange, there is a fee to be paid for trading on the cryptocurrency exchange. Therefore, if you are thinking of investing in cryptocurrency, then first of all, know about the three types of transaction fees charged on trading them.

Exchange fee

• Exchange fees are required to fulfill crypto buy or sell orders. Most of the cryptocurrency exchanges in India have a fixed fee model, but the ultimate cost of the transaction depends on the platform on which the transaction is completed. In such a situation, better research should be done about which cryptocurrency exchange is charging the lowest transaction fee.
• Apart from the fixed fee model, the crypto exchange also has a maker-taker fee model. The seller of cryptocurrency is called a maker, and the one who buys it is called a taker. Under this model, fees have to be paid according to the trading activity.

Network fee

• Network fees are paid to cryptocurrency miners. These miners use powerful computers to verify and validate a transaction and add it to the blockchain. In a way, it can be said that it is the job of these miners to ensure whether a transaction is right or wrong. Exchanges do not have direct control over network fees. If the network congestion increases, i.e. more transactions have to be verified and validated, then the fee increases.
• Usually, users may pre-set the transaction fee while using third-party wallets. But on the exchange, the exchange automatically set it itself so that there is no delay in the transfer. For users who are ready to pay higher fees, their transaction gets completed sooner and for those who have kept the fee limit low, their transaction may take some time to complete. Miners are paid for electricity costs and processing power.

Wallet fee

• Cryptocurrency is kept in a digital wallet. This wallet is like an online bank account in which cryptocurrency is kept safe. Most wallets do not charge any fees for depositing and storing cryptocurrency, but there is a fee for withdrawing or sending it. This is basically network fees. Most of the exchanges offer in-built wallet facilities.
• Crypto wallets offer the option to buy systematic cryptocurrencies and recharge smartphones and DTS services through its integrated merchant gateway.