Hello Steemians!
Are you withdrawing SBD to pay your bills, buy groceries, supplies and other things? Or you're exchanging it for other crypto?
If you're transferring small amounts of crypto you may be losing money! I know I did. I wasn't informed and only recently I realized what I was doing wrong.
If you're dealing with smaller amounts of crypto this article may help you. If nothing more you'll get informed and maybe even save a little cash in the process.
The problem
I'm not familiar with how many of you know about withdrawal/transfer fees for crypto, but they are paid for most of the crypto currencies (if not all). It may happen that if you're using the wrong crypto and transfer it - you may be losing value without even knowing it. I didn't know that until recently. I was aware of that, but I didn't know how it impacted me.
How are you losing money?
Fees and values
Well, all the exchanges have transfer fees which you pay when withdrawing your funds. Here are some images:
Poloniex. Do you see it? Transaction Fee.
Bittrex. Do you see it? Tx Fee.
Some exchanges have different fees, and other fees are the same. Let's take BTC and ETC withdrawal fee on bittrex and poloniex as an example from those images above.
Bittrex fees are 0.001 BTC and 0.01 ETC per withdrawal respectively, while poloniex fees are 0.0005 BTC and 0.01 ETC per withdrawal respectively.
At first glance 0.01 withdrawal fee may look more expensive, right? After all, it is a bigger multiplier! Yes, that is true without including the price of crypto you're transferring. If you check the prices of those cryptos it becomes a different story completely.
BTC is currently worth: $10,044.80 (at the time of writing this article)
ETC is currently worth: $27.66 (at the time of writing this article)
If you take these prices into account you get values for your fees in USD:
BTC: $10.0448 per withdrawal on bittrex
BTC: $5.0224 per withdrawal on poloniex
ETC: $0.2766 per withdrawal on both poloniex and bittrex
Those fees are taken for each withdrawal and it doesn't matter what amount you're withdrawing - the fee is the same.
That means, if you're transferring BTC directly to your wallet or another exchange you may lose from $4.7458 to $9.7682. In turn, that means that if you would like to cash out or transfer $50, you lose as much as 20% of your value. If you do that 10 times it adds up quickly. You lose from $50 to $100 depending on which exchange you're using.
That is pretty wasteful, don't you think?
How to find the transaction fee for your exchange?
That's easy.
If you're on bittrex, just click that little "-" icon next to the "+" one and it will pop up. And that is it, you'll see the value.
It's even easier as you need to click the withdraw link. Nothing to it.
That's it. It's really easy. If you're using other exchanges you may want to check those fees and maybe write them down. It should be under wallet tab or settings.
Solution
There is a solution for that. You can save a little by doing that.
The key is to exchange your BTC for other crypto, and currently the most viable and best one to use for that is ETC. But you can use others like Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), Dash (DASH) or Zcash (ZEC). It all depends on the value of the crypto and amount you're transferring.
But there is a catch. If you're exchanging the BTC for other crypto you're paying transaction/trade/market fee which is usually close to, or 0.25% flat.
More info about trading/exchange fees is available at links below:
https://bittrex.com/fees
https://poloniex.com/fees/
https://www.kraken.com/help/fees
You can find those fees for your exchanges as well.
The process
Let's continue with the previous example and say that you're having $50 value of SBD which you've converted into BTC on bittrex. Your fee for that transfer was $0.125 and you have $49.875 worth of BTC now (nothing changed, price didn't rise or fall). Withdrawal fee for BTC would be $10.0448 (the fee is the same no matter how much BTC you're withdrawing).
Now, let's exchange BTC into ETC. Your fee is $0.1246875, which brings your cash value down to $49.7503125. If you would like to transfer ETC to kraken you would pay withdrawal fee of $0.2766 (kraken may deduct some small fee as well - but I haven't noticed it yet). That would bring your cash value down to $49.4737125. Doing it that way you paid only $0.5262875 instead of $10.0448.
The end result is: You'we just paid less than $1 for that transfer vs. $5-$10 which you paid when you didn't convert it to ETC.
Is that all?
Basically, yes it is.
What happens if you're transferring larger amounts?
If you're transferring thousands of dollars per transaction then it matters less and it may be that it's more viable not to exchange crypto for another one. Do some research and see if it's viable for your case.
Tools
You can see the top 10 currencies that I use here (all of them are available for exchange to fiat on kraken):
Google docs
You can make a copy of the document for your personal use. It will make your life easier. You can use it to check if it's better to exchange crypto for another or not.
Just enter the value you're exchanging into the selected box and it will give you an estimate. You can also choose the crypto from which you wish to exchange into one you wish to exchange.
Disclaimer: Don't use this google sheet BLINDLY and without double checking the data and results yourself! I will not be held responsible if you lose money.
I made it to be used as information tool and I use it to see which currency is most viable at first glance. I am aware that it may contain errors so I would advise you to do your own research and double check the results received. I double check the info available and act accordingly.
Please! Do your own research on the exchanges you're using.
Check the transfer fees for crypto of your choice, check the trade/market fees and see which crypto you're going to exchange for fiat. Try to understand what is happening and do the math yourself before you decide if it works for you.
If you notice something wrong with the sheet let me know and I will try to fix the error.
Keep informed, learn, read and follow the information - that is the only way to go if you don't want to waste money.
Good luck!
Have fun and keep steemin!
@zneeke
Great post @zneeke!
Many crypto beginners run into these little catches that can end up costing a lot of money.
One thing I might want to add, those withdrawals (in contrast to trades) are "on-chain" transactions, so apart from the exchanges taking their fee for withdrawals, this also includes network fees.
For that matter one should always check the state of the network (almost all major cryptos have solid block-explorer sites that offer such infos) and IF those fees are adequate or on-chain transactions even feasible.
Especially with bitcoin this has recently been a major problem due to the huge backlog of unconfirmed transactions and the accordingly higher fees.
Thanks for that info @fraenk. I was so lost in the article that I forgot to mention that. :)
haha... yeah I know that feeling :P
purrrrrrrrr...
Hello! :)
purrrrrrrrr...
Thanks for educating us. Many of us do not know about it. Very helpful.
No problem. I was not aware of that until recently.
I think all the new people are unaware of that.
I've never had to withdraw cryptocurrency, but I'm worried as if it is not to lose because of the fees
Keep learning, be informed and you should be fine :)
Thank you zneeke for making a transfer to me for an upvote of 1.21% on this post!
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