Topic: Newbie here - need to understand how it works for my purposes (Read 315 times)

Hi all again.
I was lurking the web for other information and it happened that I stumbled over Monero - which seems to have way lower withdrawal fees.
What can you tell me about this cryptocurrency?
F.

Firstly, avoid  Binance, it is know to be particularly expensive. Secondly, localbitcoins will charge you a large spread, just because the guy has to make some profit for his time. My advice is to buy from someone you know who has an account. If you can't do some research on fees. Normally, you will pay something like 0.5% per trade and possible a withdrawal feed. You also need to see if they require KYC, ID, etc...

I do not know the spread from Paypal, but it may be worth having a look because it does not get much simpler than that and time is also valuable.

1. AFAIK, transactions using ATMs need higher fees. I wonder is there any local exchange in your country? if there is, it is better to use the local exchange and make a deposit by fiat to the exchange (ensure and learn that the exchange is really trusted and reputable).
2. If there is no, you can learn about global exchanges such as Binance, you can deposit to this exchange using your credit card.
There are also some other reputable exchanges that accept using CC.
https://www.bestbitcoinexchange.io/payment-methods/credit-card/
3. About fees
In exchange, commonly there are always fees applied to every transaction.
 However, the fees will vary depending on the exchanges that you are using.
The fees commonly include:
- Deposit (some exchanges make free for a deposit, but some exchanges need a fee for deposit)
- Trading fees. This also varies on a certain percentage, but commonly under 1%. Choose the trading fees that range about 0%-0.5% maximally. So far, there are also some exchanges that offer zero-fee for maker trading.
- Withdrawal fees. This is commonly the biggest fee that you should spend when going to withdraw certain coins both for your fiat or other exchanges or wallet. That is why it is better to learn at first the coin that is better to withdraw using low fees.

That's hard to say. You will have to check what exchange rate Binance gives you when it's time to pay. The rate changes often due to bitcoins volatility and price that rises and falls every second.
You can check how much you will approximately receive here > https://www.binance.com/en/buy-sell-crypto?channel=hzBankcard&fiat=CHF

When you have transferred your fiat money to Binance and the transaction has been confirmed, they will send you the coins to your registered Binance account. After that, you are free to withdraw the bitcoin to your Electrum wallet.

If you want to purchase something with bitcoin, you can send the coins directly from your Binance wallet. There is no need to withdraw to your Electrum and then pay from Electrum for whatever it is you want to purchase. Doing it that way, you will have to pay Binance their share of fees + miner fees for the second transaction that goes from your Electrum wallet to the site/person you are paying for the goods/services. This only applies if you intend to spend the entire sum that you purchased on Binance on the stuff you want to buy. If you are spending just a part of it, it would be better you withdraw the entire amount to Electum first. Because each withdrawal from Binance will cost you 0.0005 BTC in fees + there is a minimum withdrawal limit you have to respect as well.  

If you have 0.003665 BTC, minus the Binance withdrawal fees, you'll be left with 0.003165 BTC after the withdrawal. That is correct. Pay attention to my previous reply regarding the withdrawal fees and the way you intend to spend your money.

Thanks again guys!

So let me try with an example to validate my understanding...

I'm in Switzerland, so I'll base it off CHF.
If I want to buy CHF 200.- worth of BTC, I can subscribe to Binance and there I would receive 0.003665 BTC (as of the time of writing). I would guess that this would be already the net amount, with all fees detracted - correct?
So, when I have that amount of BTC, it is not yet in my wallet to be spent - correct? In fact, it is still deposited at Binance.
Afterwards I decide I want to use BTC to pay something I buy online. That's where my wallet comes into play, right? I go to Binance and withdraw some (or all) BTC. At this point, I have to pay 0.0005 BTC fees, which would leave me with 0.003165 in my wallet - right? When I look at this with the fiat currency, I would have to say that from CHF 200.- I put into BTC, I finally got only CHF 175.- in my wallet.

Is the above correct?

F.

Yes, this is the correct site to download Electrum. But try to verify GPG signatures to make sure your software is original. But make sure you saved your seeds in a safe place. It's more important to secure your wallet. If you can't keep safe your seed means your funds aren't safe.

Regarding withdrawal funds, you will find the fee calculation on the exchange of how much they will deduct. For example, if you attempt to withdraw from Binance then they will show fees there. So you don't need to worry about that, most of the platforms are the same.

For noncustodial wallet fees calculation, you may use Bitcoin Fee Calculator & Estimator
 

Exchanges have their own fixed fees, each one is charging different amounts and has different minimum withdrawal limits.
Binance for example charges 0.0005 BTC
https://www.binance.com/en/fee/depositFee


Actually, a lot of the ATMs are charging you a transaction fee after the fiat> BTC exchange has taken place and deduct that from the amount converted, the better ones let you chose the fee, the others will simply pick the next block fee so it's better to avoid buying small sums when the mempool is full and the transactions are averaging 100sat/b. Out of 50$, you might end with 25.

Thank you guys for following up.

I'll be using the Electrum app only for small amounts on my mobile, which I might just want to have handy. The main Electrum will be on my MacBook. Is this the correct and trustworthy site to get it from? --> https://electrum.org/#download

And is there any way to calculate the fee I have to pay when withdrawing money (from Binance for example) into my wallet?

F.

Hey to all,
I'm also new here and good discussion shared. I appraised and glad to joined here .

Security starts from the first step which is before you even install any wallet.
First of all I wouldn't recommend a phone wallet for "storage" because just as you don't carry around all your net-worth in your pocket you shouldn't carry around your entire bitcoin in your pocket either.
Go with a desktop version of Electrum for storage and use the Android version for amount that you want to carry around (like for spending).

The first step is to make sure you have the correct application and not some malicious software pretending to be Electrum.
One way is to download the source code and build it yourself. Another way (if you can't or don't want to do that) is to download the binaries that the Electrum developers provided but you'll have to verify the authenticity of these files using PGP.

Second step is using a secure environment. The PC you are using that is most probably also connected to a network is not the safest place to create and store a bitcoin wallet. You have to do it on an "air-gap" system. A good option is using a live Linux to run Electrum. There is also a good guide on how to use Electrum as a cold storage on Electrum docs.

And finally you have to keep physical backups of your seed phrase either as your cold storage or so that if your digital storage was damaged you have a way of recovering your funds.

The most important thing is to secure the seed phrases or the 12 english words that you have written on a piece of paper that you have used to create your wallet in electrum because it'll serve as a complete "backup" of your wallet. Moreover, I highly suggest that you should not try to exploit or root your android device since it will just increase the risk of your smartphone getting compromised, rooting exposes you to a lot of attack vectors which may not come in handy.

But then using your mobile phone for a long-term storage is not a good idea, much worse, If you are holding a certain amount of bitcoin that you cannot afford to lose. Better use a hardware wallet and integrate it with electrum that will serve as an interface as soon as possible.

The amount of transaction fee depends on the status of the mempool whether it is congested or not. You can use [1] https://jochen-hoenicke.de/queue/#0,24h to see an estimation of the required minimum amount of sats/vbyte to avoid your transaction getting stucked for days or even weeks.

Also, check this out for an in-depth explanation to fully understand how tx fee works.
[2] Bitcoin Transaction Fees - Everything in one

Hi everyone.
Again - many thanks for all your suggestions, which mainly go into the same direction.
Let me sum up and check if I've understood enough to start with BTCs...

Don't buy cryptocurrencies from ATMs, as the fees are higher than online.
The fees are relatively small when buying/selling online.
If I buy some BTC from an online exchange, then the money is at first still on the exchange itself. I could leave it there for trading or I could withdraw it to my wallet (like when I withdraw fiat money from my bank's ATM, right?!).

I've got Electrum installed on my Android device - what's the best way to secure it and not risk to lose my wallet?

Ah, and BTW: what is your opinion about localbitcoins.com? Is that a good way to get to BTCs?

And finally, something I really did not get: how much are the fees when withdrawing BTC into my wallet? A friend of mine lately told me that these fees spiked up like around 20 USD for each withdrawal?!

Thanks again!
F.

Buying cryptocurrency using the Bitcoin ATM is not advisable because the operators usually charge high fee than a cryptocurrency exchange. I will advise you to buy through the Binance p2p exchange or on this forum. However, you also need to use a secure wallet and how to keep your Bitcoin safe so I will advise you to use a recommended wallet like Electrum and verify it if you're downloading a desktop extension or you hardware wallet like ledger but you need to buy it from the official retailers.

Yes, you can use the crypto to shop online using a store like an overstock and others that support crypto payment but a transfer fee will be applied/ Only an on-chain transaction requires an almost free fee.

For every transaction that occurs in the cryptosphere, there is always a fee attached. Depending on the congestion of the mempool as at time of transaction, the fee will vary from time to time. So, don't think you won't be charged because you will. When your not charged is when you are actually buying but, it depends on what your buying with. If it is either fiat or transacting one coin for another.

Should it be fiat, you just might not get charged except that, you pay the fiat charge equivalent to qucikteller or what ever Internet banking system being used but,

If it happens to be trading one coin for another,  then you pay the charge required by miners for that transaction as there incentive for arranging it in the blockchain.

I believe that visual content is able to deliver information in the fastest time. Therefore, attending aantonop’s lectures will benefit you greatly, as he has talked about almost all the basics.

Video lectures ----> https://www.youtube.com/channel/UCJWCJCWOxBYSi5DhCieLOLQ

In short, whenever you transfer it, you need to pay the fees.

Network fees: Unpredictable and pushed into the network to ensure it's decentralized.
Services fees: They are paid for a central service in exchange for something like converting your coins into cash.


If you want to trade without paying a lot of fees then use centralized platforms, it's like banks where they work for you.

When you buy or sell cryptocurrency, you will have to pay your trading fee for exchanges. Depends on your tier of your account and how you trade, the exchange fee will be applied as taker or maker fee.

If you want to withdraw your cryptocurrency from exchanges to your own wallet, you will have to pay withdrawal fee. Withdrawal fee is used by exchange to pay for transaction fee on the cryptocurrency network, and the fee for consolidate small inputs and maintenance fee for their wallets, services, security, etc.

Exchanges simply call it as withdrawal fee. On some exchanges, you will be charged deposit fee. A fixed amount will be deducted to your deposit amount and exchange will use it for their input consolidation and wallet maintenance.

You can get taker, maker, withdrawal fees with two websites
https://www.cryptowisser.com/exchanges/
https://withdrawalfees.com/

Thank you all for your replies. I'm going to take my time and read through some stuff - might get back with more questions here :-)
Cheers!
F.

Welcome, you are at the right place to discuss something about bitcoin and cryptocurrency. Hopefully all of your confusion is resolved by the answers from the users here.

YES

YES

For every transaction you make using bitcoin, you will have to pay a fee. I don't know how much users have to pay when making transaction via ATM, but if you want to buy them from an exchange then I think you will pay a small fee. There is usually no fee for deposite fiat to exchanges, but you only need to pay a fee if you want to withdraw bitcoin to your personal wallet.

You need to pay fees every time when you are making a transactions.

So in the first case, your are buying bitcoin from ATM means you are not going to pay any fee in bitcoin but generally the prices are more premium while buying at ATM than on exchanges so you may get less BTC compared to buying BTC on exchanges.

And when you are buying a drink using BTC then you need to pay the fee along with the price then the receiver with get the btc and the fee will go to the miners.

The fees that are going to be collected:

1. The exchange fees. When you buy bitcoin or any other cryptocurrency on whatever online exchange or ATM, they'd have to make money somehow— so you're going to need to pay some fees to the exchange. Fees vary, but Bitcoin ATMs mostly has very high fees hence why almost no one recommends using Bitcoin ATMs. Instead, people mostly recommend peer-to-peer exchanges such as LocalCryptos[1] and HodlHodl[2]. Just watch out for scammers.

2. Transaction fees. These are fees that are paid for using the network to the miners. Pretty much whenever you send out bitcoin, there will be a transaction fee that you need to pay. (mostly ranging from $0.5-$5 depending on how quick you want the transaction to confirm)

But yea, looks like you're new, so I'll give you these:

• Bitcoin/crypto basics: https://coindesk.com/learn
• Wallet security: https://cryptosec.info/wallets

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[1] https://localcryptos.com
[2] https://hodlhodl.com