How do mining commissions work?
Tue, 19 Jul, 2022 at 5:06 PM
- The work of the miners is to validate transactions of Bitcoin, Ethereum and many others and generate new blocks for the BlockChain. Due to the way cryptocurrencies work, ALL transactions must ve validated by the miners.
- Miners charge a commission or mining fee (external to Bit2Me). This fee is part of the miners' profit, with this profit they pay the high electricity costs to ensure the efficiency and security of the Bitcoin (or other cryptocurrency) network.
How is the mining commission or fee calculated?
- In order to calculate or determine the value of the mining fee, it depends on several factors. One of the most determining factors is the size of the transaction within the block. But it also depends on the activity of the network at the time of the transaction is sent. As well as the urgency or speed you wish your transaction to be confirmed.
- At Bit2Me, we make a forecast commission for each transaction in order to reach its destination in the best conditions and as soon as possible. As we have explained above, the network does not have a fixed mining fee. This means that it can vary every second. That's why we have to make sure that your transaction is being executed on the BlockChain constantly.
In order to avoid calculating the mining fee manually every second, in Bit2Me we make it easier for you by making an optimal estimation of the transaction.
Bit2Me's recommendations in order to avoid paying such a high fee:
There are different scenarios, so we will describe them below and give you our recommendations.
These recommendations should be taken into consideration especially when the Blockchain network of the cryptocurrency used is overloaded. That usually happens with Bitcoin, as it's the most famous and used cryptocurrency.
- SCENARIO 1: You want to send a Bitcoin payment to a friend.
A perfect alternative is when a friend of yours opens a user account in Bit2Me, this way you will be able to send him/her instant payments, for free (no need to pay miners' commissions!) and from 1 satoshi. All you have to do is send the funds you want by Bit2Me Pay, specifying the email address, phone number or alias that your friend has verified Bit2Me account with.
- SCENARIO 2: You want to send a Bitcoin payment to another platform/exchange
Taking advantage Bit2Me Wallet potential, with the immediate Exchange functionality we offer, if the Bitcoin network is overloaded, instead sending Bitcoin payment, you can exchange it to another cryptocurrency like stablecoin USDT, and then send the payment to the destination wallet, afterwards exchange it back to Bitcoin if you wish. This process will make you jump from one platform to another with low mining costs and high speed.
- SCENARIO 3: You want to make a payment to a store, company or service provider.
In this case, the best thing is to ask if possible to pay in another cryptocurrency. The other option is to ask them to create a Bit2Me account, in order to be able to make use of SCENARIO 1. More and more companies are becoming Bit2Me users, this means that the more we are, the less we pay.
Remember that, by recommending Bit2Me, you can use your reference link, which will make your reffered receive 5€ on his/her first purchase, if it is equal or higher than 100€. On the other hand you will receive a profit on all operations. You can learn more about the reference program here.
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