My blockchain fee is too high. Why? What should I do?
For high-speed bitcoin transfers and exchanges, each transaction requires a blockchain fee. The fee is usually low, however sometimes higher fees are needed to complete your transfer or exchange. This article will explain why this happens and how you can avoid high blockchain fees.
Q. Why is the blockchain fee so high?
A. Blockchain fees depend on several factors including network congestion, transaction confirmation times (affected by liquidity providers), and transaction size (as measured in kilobytes; affected when converting bitcoin from multiple inputs such as faucet earnings or other micro-transactions).
In other words, you may need to pay higher blockchain fees if:
- the Bitcoin network is busy or loaded at the moment. Usually, the fee increases during sudden bitcoin rate fluctuations and major world events;
- your bitcoin wallet has a history of microdeposits (like referral bonuses). If your wallet has large amounts of small deposits, the size of your transaction will be bigger as it will consist of many inputs. The bigger the transaction size, the higher the blockchain fee. A more detailed explanation about transaction size, inputs and outputs can be found in this Bitcoin Wiki article.
There might be other causes of higher blockchain fees, but we've listed the most common ones.
Q. Is there anything Wirex can do about that?
A. Yes. While we cannot influence the Bitcoin network's blockchain capacity and average transaction fees in the network, we still want to support small exchange amounts for the sake of our customers in countries where $10 transfers are popular.
We are working to increase the number of liquidity providers so that we can process small exchange amounts 'off-chain' (outside of the blockchain network). This solution will not incur any blockchain fee at all for smaller exchange amounts.
This update to move small exchange amounts off-chain will take some time due to third-party integration requirements throughout our global liquidity network. Users will be notified via app updates and other announcements.
Q. What can I do to reduce the blockchain fee in the meantime?
A. The general advice to reduce your blockchain fee would be:
- Consolidate your microdeposits in another third-party wallet, then send a larger amount to Wirex as one single transaction. That will help you reduce the blockchain fee for future exchanges and transfers.
- If you are used to exchanging small amounts regularly, it might help to use larger amounts.
- Monitor the average blockchain fee in the network. If your transfer is not time-sensitive, you can wait until the average fee amount drops. You can check this on major bitcoin exchanges, block explorers or websites such as BitcoinFees.
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