Just for creating an income source, many of the exchanges indulge in charging fees with offering a fix fee model. For making each transaction easy, already defined amount is charged by exchanges. Where Bitcoin being the most popular crypto coin and the oldest one too, it becomes more credible in such a volatile industry than those coins which entered later. People are therefore more inclined towards investing in Bitcoin.
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Ways Through Which Bitcoins Trading Is Done
Trading through mining and another way through which trading is done is through purchase of Bitcoins from online exchange. Mining is difficult task which includes deep similarity with skill and technology; which are both set for solving peculiar mathematical equations. Whereas if these are traded through an exchange then it would be less dependable and less difficult. But the only constraint with this is that user would have to pay minimum amount so as to freely trade through an exchange.
Various sorts of fees are:
Transaction Fees:
This fee is levied by all exchanges as it’s their primary source of income so as to make the buying or selling of transactions easy. Where a fixed fee is set as fee is charged on a pre decided amount so as to ease each transaction. But the final commission which would be paid to an exchange might differ depending on volume of transaction and also other factors related with exchange. Research should be done by the Bitcoin investors of various exchanges and should choose the one which is beneficial for them according to their interest.
Some of the exchanges follow Maker-Taker model. This model is variable fee model, where seller is maker and buyer is the taker. The amount through which trading is done, defines the transaction fee. For instance, if one is an active trader then one is best fit as a maker and also pay a transaction fee which then lowered.
Wallet Fees:
Users are allowed for creation of their own digital wallet when working with exchanges so as to keep their cryptocurrency safer. Where maximum wallets are not into charging fee to store the coins, but on the other hand depositing or withdrawal of coins might involve charge.
Network Fees:
The Network Fee is required when payment is to be made to miners so as to verify transactions which could further be added to blockchain and thereof the procedure completes. Miners play an important role in transaction process and also involve in investing powerful computers in performing their jobs. In addition to this, the transparency and authenticity of transactions is also ensured. Their is no direct control of cryptocurrency exchange on Network Fee. It all depends on the basic law of demand and supply; which means if transaction is high then fee would also be high.
Conclusion
Therefore, it could be effectively concluded that the user of the exchange could on the basis of their interest in trading and as well on the basis of profitability or assurance, could effectively pay the fee depending on their transactions.
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