Does Oxis require a fee to use the wallet?
Unlike the transactions you carry out at centralized cryptocurrency exchanges, online payment processors like PayPal, or even your usual bank, using Oxis does not carry any type of cost. Using Oxis to store your digital assets is free.
Why Is There a Fee When Sending or Exchanging Crypto in Oxis?
You may be asking yourselfwhat is that fee for that you must pay every time you want to send a transaction or exchange cryptocurrencies through our platform...
Rest assured that Oxis does not keep even a fraction of those funds!
To send cryptocurrencies it is necessary to pay a small fee to that asset's network so that the transaction can be validated and registered in the chain of blocks with which you are interacting with. In other words, the commission you pay goes to the miners, not to the Oxis team.
What Are Transaction Fees?
Let's explain what transaction fees are a little more.
Imagine Alex wants to send 0.04 BTC to Bianca. All you need is Bianca's wallet address, enough bitcoin to send, and to log into your Wallet account.
Behind the scenes though, Alex needs to prove that the 0.04 BTC he will send really belongs to him. In addition, it is necessary for "someone" to attest that Bianca received this amount of cryptocurrencies and that they no longer belong to Alex.
This is where miners come into play, who receive their names because they are in charge of “discovering” new coins/tokens and processing new batches of transactions. It is as if they were digging through a pile of cryptographic codes to decipher the information contained in a transaction.
To achieve this, miners use resources such as internet, electricity and computing power. Since the cryptography that protects the transaction information is adapted according to the number of miners that are working also known as the network hash rate/power, times and costs of processing transactions can vary.
The miners need an incentive to justify this expenditure of resources. In addition, transactions need to have a cost, otherwise anyone could send a huge amount of very small, or “junk” transactions, in order to try to negatively impact the network.
In that scenario, miners would spend a lot of time and effort validating those transactions and the rest would be put on hold, making the network congested and slow.
Therefore, most cryptocurrencies are designed so that every time a user like Alex wants to transfer funds, they also include a commission (fee) that will be the payment to the miners for validating that the information contained in the transaction is valid.
How Much Does a Transaction Fee Cost?
This depends and varies based on many factors such as the network itself being used as well as the current network use/congestion levels. The commission for sending 0.04 BTC from Alex to Bianca may cost the same as sending 1 BTC from Camila to Daniel. There can also be the scenario that the 0.04 BTC that Alex sends costs more than the 1 BTC that Camila sends.
In the case of bitcoin, this depends on the size of the transaction, that is, the amount of outputs ( UTXO ) it contains. Yes, we know that said like this, it sounds complicated.
You see, every time you want to make a transaction with Bitcoin, you are spending small amounts of cryptocurrency that you have in your account. These units do not mix with each other, and form a set that reflects the balance of your wallet.
Thus, each bitcoin transaction is as if you put together a bunch of small coins (like pennies) that together make an amount (think of a dollar). A transaction like 0.04 BTC can have many chunks together, whereas a 1 BTC transaction may not. Thus, the less the amount of information (outputs) that must be processed from a transaction, the cheaper it will be.
In the case of Ethereum, a blockchain that does not work through UTXOs, the story is different. The transaction will continue to be more expensive the more weight it has, but this weight will be determined by the type of transaction that is made. For example, a payment transaction will be much lighter than a smart contract.
How Long Does a Transaction Take to Confirm?
Another factor that can determine the value of a transaction is network congestion, but also the time it will take to take effect. Miners, in the event that there are not a large number of transactions to process, will include all of the transactions in the queue (aka mempool) that are in the mining pool as much as possible.
On the other hand, if the network is congested and there are too many transactions to process, miners will give priority to those transactions that include a higher fee, and therefore a higher profit, leaving aside those transactions with low fees.
Thus, when the network is congested, the fees will be much higher to process transactions, to give priority to the transaction and reduce the risk that the transaction will not be confirmed for a long time.
Each confirmation, in the case of Bitcoin, happens every 10 minutes. But if the network is very congested, the confirmation can take, as we have seen, depending on the commission paid by users days at times.