I wanted to transfer BTC from coinbase to Celcius for the APY, but it costs me 0.0003 BTC just to transfer this money. That's like $5.
What is the workaround for this? How can I transfer money with small fees in the cents?
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1Please note that while there are transaction fees inherent to the Bitcoin network, a service that holds your bitcoin can charge whatever they want for transferring it. Some services only charge the necessary minimum to cover transaction fees, but others charge a very high fixed transfer fee (a round amount like 0.0003 BTC suggests the latter).– Vojtěch StrnadMay 27, 2022 at 13:48
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1If you stop using custodial services, you'll have full control over the transaction fees. But when using such services, you are stuck paying whatever fee that service decides to charge you.– chytrikMay 27, 2022 at 21:15
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1 Answer
The workaround is either to use something like the Lightning Network or to choose a fee that is small and wait for a much longer time.
The transaction fee is effectively a bid in an auction of space in a Bitcoin block.
By using some system layered over the Bitcoin network you can potentially avoid the auction for many transactions.
For example see Liquid Vs Lightning
Layer-2 protocols expand the range of options available to Bitcoin users. They enable Bitcoin to scale and bring benefits that include lower transaction costs, improved speed, and increased anonymity.
This article compares two different, but complementary, layer-2 payment solutions for Bitcoin: the Lightning Network and the Liquid Network.
answered May 27, 2022 at 9:51
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"The transaction fee is effectively a bid in an auction of space in a Bitcoin block." Ahhh i am a noob. Thanks for the analogy of an auction. Just a few moments ago, it was just 0.00005BTC! I am interested in the "system layered over the Bitcoin network" you are speaking of but i have no idea what this mean. Coudl you please elaborate? May 27, 2022 at 11:04
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