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Why do I pay higher transaction fee than normal when I withdraw my money from noise.cash?

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Avatar for Telesfor
Written by   1238
1 year ago (Last updated: 10 months ago)

Many people wonder: Why do I pay higher transaction fee than normal when I withdraw my money from noise.cash? Aren't Bitcoin Cash transaction fees supposed to be very low? Should I not pay less than one cent? Why do I sometimes pay several cents?

To understand this, you need to understand how a Bitcoin Cash wallet works. I have already written something about it here. Your Bitcoin Cash wallet is similar to your normal phisical wallet. When you receive a deposit, coins are assigned to your address in the blockchain, as in your phisical wallet. These coins are so-called your unspent transaction output - UTXO's.

Here you can see my UTXO's on memo. You see, there are very very many, because I got a lot of small tips on Memo. My memo wallet is therefore very "heavy" (you have to imagine you have a phisical wallet with several hundred one cent coins, it would be very heavy, wouldn't it?).

The fees for a Bitcoin Cash transaction are calculated based on the "weight" of the transaction. The cost are approx . 1 Sat per byte. It doesn't matter how much BCH you send. It is important how many coins (UTXO's) are in your transaction. Sending a coin costs about $0.001.

Imagine you have 200 one cent coins in your wallet. If you tip someone $0.02, two 1 cent coins are used and a small fee of about $0.002 is charged. But if you want to transfer $2 it will cost you about $0.20. If you send $20 with 2000 very small coins, it can even cost $20. All because your transaction contains a lot of very small coins and is therefore very "heavy".

Explained in another way. Imagine you have three wallets A, B and C. In wallet A you have $2 in one coin. In the first attempt you transfer $2 dollars directly from wallet A to wallet C. You move only one coin and pay a small transaction fee of $0.001.

In the second attempt you do it differently. First, you make 200 very small transactions worth $0.01 from wallet A to wallet B. Your $2 coin is split into 200 1 cent coins, you move one coin for each transaction and for each transaction you pay also a small fee of 0.001$. You have now 200 very small coins in wallet B. Now you transfer your 2$ in one transaction from Wallet B to wallet C. Since you have a lot of small coins in Wallet B, the transaction fee is much higher because you have to pay for the movement of each coin. You have to pay about as much as you paid for the 200 transactions from A to B in total (i.e. about 0.20$).

It is advisable to swap the many small coins for one large one from time to time. This is called consolidation. You can do this by sending all the coins to yourself in the same wallet. You will see that this will cost you a little and reduce the amount of your wallet a little, but you can be sure that your next transaction, no matter how big it is, will cost you a fraction of a cent. The fee you pay for consolidating will be paid sooner or later, so don't be so sad that your amount after consolidation is a little lower. It is lower, but it is correct now. Please consolidate soon after a block is found, otherwise you may run into the 50 chain transaction problem with this many coins. Here you can see a transaction where many small coins were consolidated into one big coin.

Note that a Bitcoin Cash transaction can be a maximum of 100000 bytes. This means that if you have a lot of very small coins, you cannot spend them all at once. You have to split your transaction into several transactions and spend your money step by step.

If you want to see how many coins are in your wallet, install electron cash for PC and import your seed. Please make sure that you use the appropriate derivation path. You can read about derivation path here.

Very good electron cash youtube tutorials you can find here.

PS

It is a simplified explanation for people who are not technically savvy.

PS 2

For some time now, noise.cash has not been sending very small amounts to your wallet, so consolidating is hardly necessary.

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Avatar for Telesfor
Written by   1238
1 year ago (Last updated: 10 months ago)
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Comments

You explained a complex matter very clearly. Consolidation is required before withdrawing.

$ 0.00
9 months ago

And will the consolidated fees of swapping 200 coins into 1 be less than transacting the same 200 coins?

$ 0.00
1 year ago

No, the fees will be the same because the size of the file in kB will be the same. You should still consolidate because if you have too many coins in the wallet (approx. 600), the transaction will no longer be possible. The transaction will be too "heavy", you will have to make several transactions to send the BCH.

$ 0.00
1 year ago

Learned something new today, thanks a lot!

$ 0.00
1 year ago

Well Actually it doesn't matter to me if there's a fee as it's not that very big. I think it's just enough.

$ 0.00
1 year ago

I still recommend that you consolidate the wallet regularly. If you want to send more than 600 coins at once, it can cause problems and the transaction can be rejected.

$ 0.00
1 year ago

Oh okay thanks for the advice 😇💚

$ 0.00
1 year ago

Waooooh man i was so confused you explained this one very well now i know why my fee,s sometime high or sometime normal very thankyou for this article will share with my freinds who are confusing me and asking to do withdraw when you reach 1$ so you will be charged with less fee

$ 0.00
1 year ago

Nice, now i understand how that works, thank you for the info.

$ 0.00
1 year ago

Really nice

$ 0.00
1 year ago

I read your article but I don't understand what is UTXO?

$ 0.00
1 year ago

UTXO means - unspent transaction output. These are all your unspent coins, all the coins you have in your wallet and can spend.

$ 0.00
1 year ago

got it! thanks!

$ 0.00
1 year ago

Your Article is so much informative..for those people want to have always Free transactions. For me Im happy that noise.cash launch cause it help me a lot..there is no FREE,, only Noise.cash and read.cash give us Free opportunity to get 💰..lets just Peace Fellas 🤣🤦🤦🤦

$ 0.00
1 year ago

A good analogy would be this: imagine receiving $100 in $5 bills, so you have 20 $5 bills. And it costs a fixed amount to send each bill. So if you want to send 100$ to someone else (or yourself on another wallet) you'll have to pay 20x the fixed fee. It only starts to matter when the amount you wanna send is close to the fee of ~$0.001, which happens a lot on noise.cash.

$ 0.06
1 year ago

Very good

$ 0.00
1 year ago

Oh, I see the more there are a lot of transactions made the more the trans-fee incurs rather than putting $20 in on shot on your wallet than making hundreds of transactions that is equivalent to $20. It's like when you are shipping a thing the more the weight is heavier the more the shipping fee is higher, am I right?

$ 0.00
1 year ago

I have updated my article. Maybe you understand it a little better now.

$ 0.00
1 year ago

Did you mean the less transaction you make the lesser the fee is? Thats what i understand.🤔

$ 0.00
1 year ago

Yes less small transactions you get the lesser the fee for your withdraw transaction.

$ 0.00
1 year ago

To be honest I hardly understand what you try to explain. Simplyfied it isn't for me. I only notice tips from read.cash are send to my bitcoincash wallet. I have no idea what the fee is.

The only thing I would like is a wallet in the same way as read.cash has (included with the account). Sending those tiny bits means I receive more emails about the requirements plus I can not find back at my Bitvavo list my other transactions. It's an endless scrolling.

$ 0.00
1 year ago

I did understand a little I think. Although the wallet shows you the total there is, internally it is separated by the number of transactions you have received. The more transactions that are part of the amount you are sending, the more it costs. That was what I understood

$ 0.06
1 year ago

You have understood that very well 👍

$ 0.00
1 year ago

Thanks for explaining. I think it's clear now. You pay per transaction/sending no matter the amount/weight. I'll check it out and keep an eye on it. 👍

$ 0.00
1 year ago

The many small transactions you got are the small coins. If you get $2 with one coin and then spend it, the network fee is very low. If you get $2 with 200 coins and then spend it all at once, the network fee is higher. That is all.

$ 0.00
1 year ago

Okay, that part I understand. This means a fee it paid later, once you spend it? I'll keep it in mind and check it out once I come to spending. Does it count too if I swap or sell?

$ 0.00
1 year ago

The exchanges charge separate fees for swaps or selling. These vary from exchange to exchange and have nothing to do with the Bitcoin Cash transaction fee that you have to pay for a transaction.

$ 0.00
1 year ago

Okay, thanks for the info. 👍

$ 0.00
1 year ago

Thank you for tipping me 😄

$ 0.00
1 year ago
$ 0.00
1 year ago
$ 0.00
1 year ago

Yeah, thank for the tips for both of you

$ 0.00
1 year ago

So it is better to use different wallet for micropaymets and more bigger ones?

$ 0.00
1 year ago

That's a good idea. I send micropayments from the wallet I receive micropayments into. But even though I sometimes empty my "heavy" mikropayments wallet at once, I have never paid more than $0.20 network fee.

It is good to spend the very small coins, because some wallets sometimes have problems with a lot of UTXO's.

$ 0.00
1 year ago

I had no idea this work that way. Very much thank you. I need to study more haha

$ 0.00
1 year ago

So it's best to tip with a QR code? Am I right?

$ 0.00
1 year ago

It doesn't matter if it's a QR code or not, a lot of very small tips make the wallet "heavy". If the wallet contains many very small coins, it costs a little more to spend from the wallet.

$ 0.00
1 year ago

I don't really know how much it cost to receive or send tip on noise.cash. I used my read.cash wallet to receive my tips from noise.cash, do this mean each time I tip someone on noise.cash I am paying a fee from my read.cash wallet?

$ 0.00
1 year ago

Getting BCH never costs you anything. Only sending costs you a network fee.

If you tip with QR code you pay a small network fee, if you do it with free tips, noise.cash will pay the fee for you.

$ 0.00
1 year ago

I knew that we have to pay fees for every transaction.But I do not know how much we have to pay.Coinbase wallet has low fees for transactions but Wirex has very big fees.Thank you for your explanation.Now I understand much more how this works.

$ 0.00
1 year ago

Wirex is an exchange. Exchanges charge additional fees, which can be very high. They have nothing to do with normal Bitcoin Cash network fees.

$ 0.00
1 year ago

It's not actually expensive.. Still less than $1

$ 0.00
1 year ago

Thank you very much sir @Telesfor for sharing your information, quite useful and easy to read, especially for newbies who are still "in diapers" when it comes to the world of cryptocurrencies.

$ 0.00
1 year ago

So glad to read this, it added knowledge to my brain about Crypto. I guess a transaction fee is everywhere as long as it's not so high. I think it will be okay. As for the memo.cash I really don't know how to use.

$ 0.00
1 year ago

Thanks for this simplest explanation! Now, I understand better. I'll be expecting higher fees with my unspent coins in my Bitcoin.com if the time will come I'll withdraw or move it.

$ 0.00
1 year ago

Oh. Now I get it. This is why I pay a higher fee when I'm transferring BCH from my readcash wallet to my main wallet, than when I'm transferring BCH from the main wallet to another. Makes sense.

$ 0.00
1 year ago

Thank you for all this information that you give. It is very useful especially for people like me who am a fan, without any idea of ​​the whole world behind the post.

$ 0.00
1 year ago

I have configured to get my tips directly to bitcoin.com wallet. Would I still require to pay such high fee?

$ 0.00
1 year ago

If you have a lot of unspent coins in the wallet, you will pay a higher fee. Many coins - higher fee.

$ 0.00
1 year ago

Well, it depends really. You can force it to 1 sat/byte, but Bitcoin.com usually uses 1.01 sat/byte. Best to explore more wallets.

$ 0.00
1 year ago