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Why withdraw coins (Why are there withdrawal fees)?

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Why withdraw coins? We know that many people don\’t know what cryptocurrency is.

Why withdraw coins (Why are there withdrawal fees)?

Why withdraw coins? We know that many people don’t know what cryptocurrency is. But many people are very familiar with and believe in Bitcoin, as it can help many project parties achieve asset decentralization and secure management. So why is that? Why do we need a digital token? Why do we do this?

First, we need to understand that withdrawing coins is a financing behavior, it is a way of circulating internal funds of a company, an investment tool, or a service. This operation generally falls into two categories: trading on an exchange and acquiring user funds through an exchange platform. If previous investors did not want to keep their money in the exchange to buy coins, now their money is gone. So, if you want to exchange all your coins for money from another exchange, you have to go to the exchange to find another exchange. Therefore, in order to make it easier for everyone to participate, we often propose the requirement to withdraw coins.

1. The exchange must first provide fiat currency deposit and withdrawal channels (such as USD, etc.), and then convert fiat currency into USDT (stablecoin). If you want to cash out USDT, you can directly deposit it into the specified address or wallet and wait for the opportunity to withdraw. This is a big risk for those who do not want to withdraw funds from a bank account. In addition, the exchange cannot accept fiat currency deposit and withdrawal channels like ordinary OTC transactions, because most of the time there is only USDT in the account. And when there is a need to withdraw coins, there are usually many customers using various exchanges. However, such demand is often not timely and effective, especially in certain cases, withdrawal may not be possible. In addition, since there are no relevant legal requirements, many exchanges will actively cooperate with regulatory agencies, which makes withdrawing coins more and more difficult. (Note: September 19th “Announcement on Handling Bitcoin Futures Contract Products”)

Why are there withdrawal fees?

Editor’s note: This article is from the Wind and Fire Wheel community (ID: FHBT18), author: Peipei, authorized reprint by Odaily Planet Daily.

Hello everyone, I am Peipei. Today, when withdrawing coins, we saw a news:

“Do you want to withdraw coins?” This message is about the issue of withdrawal fees. In fact, this matter is the same as previous transactions. There are also many problems in the “transfer” process during withdrawal. “Withdrawal fees are too high, and there is a high amount of exchange demand.” This is because the withdrawal process takes a long time, the operation frequency is low, and withdrawal requires confirmation, and so on. So if you want to withdraw coins, you have to pay a fee to complete it. Of course, it may not be necessary to put the money in the account first, and then add some tips. In the end, it is better to pay it directly to someone else. As for the exchanges, they generally do not charge fees, but it is still unfamiliar to ordinary investors. After all, many centralized exchanges in China currently have their own fiat currency deposit and withdrawal channels, as well as various stablecoin withdrawal channels. For example, Bitfinex and Gemini allow direct withdrawal from one platform and then use the funds to deposit into another platform. In addition, exchanges will charge fees. There is a concept called “transaction fee”. Simply put, the more money the user pays, the more the merchant will receive. So why is that? The reason is obvious, because a certain transaction fee is received every time you deposit, and the transaction fee is usually 1 USDT = 0.002 BTC. In other words, each transaction is packaged and sent out according to a certain proportion, and no fees are charged. However, for non-mainstream digital currencies, this method is special. However, since most digital assets are circulating on the Ethereum blockchain currently, under certain conditions, it may even be required to pay a portion of the transaction fee, such as in the Ethereum network where each ETH or ERC20 token can receive corresponding transfer rewards, and when you use the Ethereum network, it will also be affected, which may cause significant losses. Does this mean that Ethereum is congested, and the systems of most exchanges are unable to meet user experience anymore? “Flash loans,” “oracle+dapps,” and other solutions have confused many people. In these cases, some people are willing to mortgage Bitcoin into an Ethereum address, but find that they don’t have enough time, so they choose to apply for a refund from the exchange, and at this time they only hope to receive a few hundred dollars of balance. But in fact, it does not mean that all the exchange’s money will be used to repay the loan or receive a commission. So, if your Ether coin is transferred to an exchange, you will need to pay a portion of the transaction fee and wait for the start of business after the contract is deployed. In addition, to reduce the fluctuation risk of transaction fees, there is another way, which is to deposit a small amount of Bitcoin, and then continue to redeem the Bitcoin borrowed against it in the exchange. As for whether this problem can be resolved as soon as possible, I think, at present, there will still be a large amount of fiat currency liquidity mining activities on Ethereum (possibly during the recent price rise period), and various solutions will continue to be explored. Therefore, users need to be cautious when withdrawing coins, considering factors such as fees and network congestion and choosing the appropriate timing and method for withdrawal.

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