That was an eye catching, attention grabbing subject line in the email I received today.
The high Ethereum transaction fees (gwei) has been a popular theme on Pb0x of late.
It spiked my interest me and prompted me to open the email and have a looksie. Wanted to find out what the go is. Is this fact or fiction?
Back in 2017 we were checking out all the exchanges to find the best to serve our needs at the time. Ended up registering with more exchanges than I can remember.
CoinJar was one of them but never used their services because the commission fees were too high, there was a premium to buy and CoinJar had only a few of the main crypto listed.
But we remained on CoinJar's mailing list, as they regularly sent out market updates and I like to keep tabs on things.
Established in 2013, CoinJar is Australia's longest-running digital currency exchange. CoinJar services allow users to buy, sell, store and spend digital assets.
- 400k users
- 100+ million AUD assets in custody
- 1.5+ billion AUD traded
- CoinJar Card
- Android and iOS app
Ethereum Withdrawal Fees Have been Lowered
The email we received was a copy of the CoinJar blog on Medium.
These changes only apply to Ethereum at this stage and are effective immediately.
Transfers of 7.5 ETH or less can expect up to an 80% reduction in transfer fees
When sending a cryptocurrency that has a dynamic fee to external addresses, the transaction fee is automatically calculated.
CoinJar will now recalculate the dynamic fee every 15 minutes, giving more accurate network fees. This fee will account for the amount you are sending and the blockchain congestion level.
CoinJar's network fee calculation works to ensure the transfer receives prompt confirmations while keeping fees as low as possible.
CoinJar are trying to more closely align their fee pricing with Ethereum’s average transaction fees.
The average transaction fees can be viewed here:
Ethereum Average Transaction Fee (EAFT)
- measures the average fee in USD when an Ethereum transaction is processed by a miner and confirmed.
- can spike during periods of congestion on the network. As they did during the 2017 to early 2018 crypto boom where they reached $3 USD.
- currently is $19.68 USD
- down from $22.81 USD yesterday
- up from $0.1485 one year ago
- down 13.74% from yesterday
- up 13.15K% from one year ago.
How Do CoinJar Come Up With The 80%
Using the monthly chart we find
- monthly high $32.72 transaction fee
- monthly low $11.33 transaction fee
The monthly low is approx 65% less than the monthly high.
So it is possible to reduce the Ethereum Transaction Fee by 80% if you pick the right 2 data points. But that is not very practical. You would need to test the transfer every 15 minutes to find the lowest point.
But could be useful to use the EAFT chart to give your self a reference point. Then try a few random transfers until you get a fee you are satisfied with.
Comparison With Other Exchanges
Coinbase charges the actual mining fee, I have not used Coinbase for awhile and assume that is still the case.
Coinspot charges fixed 0.008 ETH = $17.93 USD
Binance charges fixed 0.005 ETH = $11.20 USD
Both are based on ETH @ $2241.79 USD
(The EATF may have been calculated at a higher USD rate as it is an average only for the day).
In the past I found Binance and Coinspot both charged approximately 10x the actual mining fee charged by Coinbase. But as the transaction fees increased exponentially the gap has closed.
Both Binance and Coinspot do not review their charges every 15 minutes as does CoinJar but charge a fixed amount of ETH.
So with Binance and Coinspot you miss out on any drop in fees and are also penalised when the $$$ value of ETH increases as their charges are fixed.
As with most advertising that promises saving of up to 80% you rarely save anywhere near that amount.
But it is a good thing that the CoinJar ETH transaction fee is recalculated every 15 minutes, so you can take advantage of any drops in EATF that may occur.
Both Coinspot and BInance ETH transaction fees, being a fixed amount and not regularly recalculated, are more correlated to the $$$ USD value of ETH than the actual mining fees. Sometimes that may work to your advantage but generally in a bull market it will not be to your advantage
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