Purchasing Bitcoin on most CEXs is too costly because of their high BTC withdrawal costs!!

Purchasing Bitcoin on most CEXs is too costly because of their high BTC withdrawal costs!!

By Greenchic | Investing and Trading | 23 Mar 2022


 

crypto, bitcoin, cex, blockchain
Withdrawal fees in Binance when BTC is withdrawn using the BTC network is 0.0005 BTC about 21$ - Ouch!!

 

 

 Buying Bitcoin from CEXs have proved to be a costly affair

 

Lately, I am learning more practical things about Bitcoin, because to tell you the truth although I am a hardcore Bitcoin believer, its transaction fees whenever I brought BTC from WazirX Exchange has been high, about 18$ to 25$.

This discourages small investors like me from buying BTC and sending it to my personal wallet(Atomic), as transaction fees eat away my principal investment.

All these years I have been thinking that those high fees are Bitcoin Blockchain fees but no, those fees are just fees charged by exchanges and actual Bitcoin Blockchain fees at most times are much lower than Centralized Crypto Exchange(CEX) fees.

 

 

 Mind boggling BTC withdrawal fees in CEXs as if its Ethereum Blockchain fees

 

cex, crypto, exchanges, bitcoin

 


Purchasing BTC through these Indian CEXs have been a costly affair!!


Withdrawal fees for Bitcoin in WazirX Exchange is 0.0006 BTC, which amounts to Rs 1940.74 that is about 25.74$.

Withdrawal fees in Coindcx exchange is a little lower with BTC withdrawal fees being 0.0005 BTC, that amounts to Rs 1621.11 which is 21.29$.

These fees are damn high and to tell everyone the truth I was not able to convince people about the merits of investing in BTC, because these transaction fees dissuade people from buying BTC in the first place.


These fees are apart from the maker/taker fees these exchanges take which is 0.2%.

So, obviously buying Bitcoin from these CEXs is a costly affair and both these Indian CEXs are well known, established Indian CEXs.

Although, Coindcx charges lesser fees than WazirX and is therefore more cost effective, if one gets into building BTC investments using these exchanges, only more well to do classes of people can afford to buy BTC, and BTC is supposed to be for everybody right?. So, this is disappointing!!

 

 

BTC Blockchain fees at ordinary times are affordable!!

 

BTC Blockchain transfer fees currently can be checked in mempool.space and its 1 Sat which is 0.06$, that is less than Rs 5!! .

bitcoin, blockchain, fees


Mempool.space
Actual Bitcoin transaction fees are much lower than withdrawal fees charged by CEXs. Yeah 0.06$ vs 21$ or 25$. Ouch!!


Of course, in times of peak BTC transaction periods the fees will shoot up because we know that the Bitcoin network gets clogged since its transaction per second (TPS) limit is 7 transactions because of the Network’s 1MB Block size limitations limiting Bitcoin’s Network’s throughput.

However, in periods of normal transaction times like it’s been of late, BTC transaction fees are relatively low and transactions happen relatively fast.

Day before yesterday, I checked BTC Blockchain fees being 1 Sat even for high priority transactions, but despite the Bitcoin Blockchain fees being so low, these CEXs charge high withdrawal fees. Ouch!!

This is why in my early days of buying Bitcoin since I used to buy very small amounts I used to hold those BTCs in exchange wallets only even though it was something I was not comfortable with but those withdrawal fees were too damn high for me to afford, discouraging me from moving my small amounts of BTC purchases to my Atomic Desktop wallet.

crypto, merchandise


T-shirt at sale in Amazon
I knew that if its not your keys its not your crypto yet still kept my purchased BTC in exchange wallets because transferring BTC to my private wallet is very costly for a small investor like me

 


 Purchasing BTC from P2P platforms may amount to be cheaper although BTCs are sold at a premium here

 

bitcoin, p2p, trading

 

The other way to buy Bitcoin bypassing CEXs is P2P crypto trading platforms of course. I have been checking some out like Hodlhodl, paxful and agoradesk.

Here, everybody sells their BTC at a premium, still purchasing BTC here may amount to be cheaper but seller parties have a huge advantage as they can sell BTC at a premium here compared to prevailing market rates of BTC.

BTC transfer rates at these P2P platforms will be according to the Bitcoin Blockchain transfer fee, so fee wise these platforms are more affordable to use to buy BTC although BTC sellers as mentioned sell BTCs at a premium.

So, if you are a seller you can get much better rates for selling your BTC on P2P trading platforms.

 

 

Here is breakdown of fees from these P2P Bitcoin trading platforms I mentioned above.

Hodlhodl

  •  Prevailing BTC Blockchain fees that you can check at https://mempool.space/
  • Trading fee - 0.6% for traders trading without KYC and 0.5% for KYC compliant traders
  • Some transaction fee deducted on the BTC deposited when its released to the buyer.

 

Check details for further clarity here - https://hodlhodl.com/pages/faq#how_do_fees_work

 

Agora Desk

  •  Prevailing BTC Blockchain fees that you can check at https://mempool.space/
  • Of what I read 1% arbitration protection fee is charged to trading parties who post ads, there is no other fee for buying or selling BTC.

Check details here - https://agoradesk.com/fee

 

 

Paxful

 

  • Prevailing BTC Blockchain fees that you can check at https://mempool.space/
  • Sellers have to bear relevant fees for transfer of funds from Paxful to their accounts(0.5% to 1%) plus escrow fees.

 

Check details here - https://paxful.com/support/en-us

 

More on my experiences engaging in P2P Bitcoin trading where I sold some Bitcoins in another article.

 

 

Conclusion

Well, there is more we need to learn about the ways of the Bitcoin market and ecosystem, so that our BTC investments are more profitable. I will cover other BTC wise hodling practices in my subsequent articles.

 

Thank you for reading my article.

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Greenchic
Greenchic

I love to write on things I am passionate about - environment, citizens activism, crypto and life in general. I am a cat enthusiast, nature lover. I am excited to engage at the Publish0x platform by reading and writing crypto and other content here.


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