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What are mining fees?

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What are mining fees?

Mining fees are small amounts of cryptocurrency paid by the sender to get a transaction added to the blockchain. Miners are the specialized computers on a blockchain network that confirm transactions and secure the blockchain network.

Keep in mind that the transaction mining fee goes 100% to the miner who adds your transaction to the blockchain. These fees do not remain with NetCents.

Why do Mining fees vary?

Mining fees vary based on the blockchain the transaction is initiated on. Some blockchains also calculate the mining fees based on the transaction size (in bytes) and the mining fee is almost never a percentage of what you send or a fixed amount.

Mining fees are calculated based on the current network bid. When miners check the list of pending transactions to be added to the blockchain, they will pick the most profitable first. This is why when there is network congestion, a lot of transactions will compete to get confirmed by the miners and every new transaction tries to outbid the existing ones by paying a higher fee. Then the next transaction will offer a higher fee and so on. Sometimes the fees will get really high.

How do I send with the right Mining fee?

Most eWallets include an automatic algorithm that calculates the adequate mining fee in all outgoing transactions. Some will even let you enter that fee manually.

To make sure your wallet includes an appropriate mining fee, change your settings to include a dynamically-calculated fee. That will help and increase the chances your transaction arrives on time, even when the blockchain network is busy.

Note: As opposed to eWallets which will add the fee to the amount you're trying to send, custodial exchanges will deduct the miner fee from the amount of your withdrawal transaction.

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