Why Crypto Exchanges Should Lower Their Fees and Profit Margins

alyssa85

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Quote from: vintages on December 13, 2019, 10:51:26 AM

I hate to say this but I have to; it is not about all about splashing the fees.
Though I am a big advocate for lower transactions fee in exchange trading and all that but it's a pity that most exchange with lower fee has the worst service; they most likely use lower TX fee to attract customers. So as a user, you will come to realise that you need a good service after all more than lower fee.

Spot on.

Also, good security on the exchanges costs money. It's no good demanding low fees, and then wailing when the exchange gets hacked and coins are lost, because they weren't making enough money to invest in hacker-proof security.

milewilda

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Quote from: daarul50 on December 14, 2019, 08:50:56 AM

Quote from: alyssa85 on December 11, 2019, 10:19:34 AM

Quote from: erricducducan26 on December 10, 2019, 02:35:17 PM

The crypto industry has yet to evolve from exchanges which are nothing more than digital banks in reality. A couple are taking bold moves to slash their fees but how many others will follow and how will it affect the wider crypto industry.

https://bitcoinist.com/why-crypto-exchanges-should-drop-their-fees-and-profit-margins/

The article criticises Coinbase and praises Poloniex for having zero fees.

The only problem with this: Coinbase is a solid exchange and Poloniex is crap.

The move from Poloniex to have zero fees is similar to what Cryptsy did before they did a runner. Zero trading fees (to encourage volume) and high withdrawal fees (to discourage withdrawals and make a profit from those who do take their money out).

It's not a good sign. You should always ask yourself how these exchanges make profits. Some are upfront by charging fees. Others are dodgier and are using your coins to trade while trying to discourage you from withdrawing.

that is pretty much makes sense.

could not agree more with you. there is a lot of problem with poloniex such as freezing user's account without valid reasons , a sudden maintenance, extremely poor support and manymore! that is why they have zero fee as they lack of professionalsm .
better to have some fee in an exchange but gives you a security rather than zero fee but you will feel insecure the whole time.

there is money , there is quality. don't blame if you get charged as it is for providing a better service , that's all.

Would prefer on this way and definitely choose it up rather than risking on using a service which you've known that have already some issues in the past upto present.
Going back to the days where Poloniex is one of the top exchangers but suddenly they ranked down when Circle decide to buy it and get involved into account blocking and
other service related which in result to that outcome.Now they're offering 0% fees? I highly doubt that this one wont buy out.

South Park

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Quote from: Pearls Before Swine on December 11, 2019, 03:36:19 PM

Quote from: jossiel on December 10, 2019, 06:25:20 PM

The article is telling about the zero fees which was done by Poloniex. But thinking of the consequences if exchanges will allow this to happen, I only see a very small chance that it can.

I see an even smaller chance, as in *zero*.

How do you think exchanges make their money? Plus I don't understand how anyone could possibly complain about trading fees on crypto exchanges, because they're all very low to begin with. If you had to complain about anything, it should be withdrawal fees. Those are usually much higher than what it costs an exchange to actually send your withdrawal out.

Yes, in a perfect world it would be lovely if exchanges didn't charge anything to trade, but we don't live in a fantasy land like that.

In my life I find many people that seem to have lost connection with the way the world works, the owners of those exchanges do not offer their platforms just because they want to help the spread of cryptocurrencies around the world, it is a business and like any other business they need to make money and in the case of exchanges the main way they have to earn money is by charging fees, and if you compare the fees that you're charged for each trade and you compare those fees to the stock market you'll find that the fees that we are paying are very low.

daarul50

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Quote from: alyssa85 on December 11, 2019, 10:19:34 AM

Quote from: erricducducan26 on December 10, 2019, 02:35:17 PM

The crypto industry has yet to evolve from exchanges which are nothing more than digital banks in reality. A couple are taking bold moves to slash their fees but how many others will follow and how will it affect the wider crypto industry.

https://bitcoinist.com/why-crypto-exchanges-should-drop-their-fees-and-profit-margins/

The article criticises Coinbase and praises Poloniex for having zero fees.

The only problem with this: Coinbase is a solid exchange and Poloniex is crap.

The move from Poloniex to have zero fees is similar to what Cryptsy did before they did a runner. Zero trading fees (to encourage volume) and high withdrawal fees (to discourage withdrawals and make a profit from those who do take their money out).

It's not a good sign. You should always ask yourself how these exchanges make profits. Some are upfront by charging fees. Others are dodgier and are using your coins to trade while trying to discourage you from withdrawing.

that is pretty much makes sense.

could not agree more with you. there is a lot of problem with poloniex such as freezing user's account without valid reasons , a sudden maintenance, extremely poor support and manymore! that is why they have zero fee as they lack of professionalsm .
better to have some fee in an exchange but gives you a security rather than zero fee but you will feel insecure the whole time.

there is money , there is quality. don't blame if you get charged as it is for providing a better service , that's all.

Joseph Knight

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I dont know. Fees trading are not that large, unless you trade alot all the time.

Withdrawal fees can be alot, to withdraw small amounts ... This should change.

Beparanf

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Quote from: vintages on December 13, 2019, 10:51:26 AM

I hate to say this but I have to; it is not about all about splashing the fees.
Though I am a big advocate for lower transactions fee in exchange trading and all that but it's a pity that most exchange with lower fee has the worst service; they most likely use lower TX fee to attract customers. So as a user, you will come to realise that you need a good service after all more than lower fee.

Yes good support is way better if they can assist us in everything that we are doing in their exchanges. If there are issues that happened and if there are problems need to resolve fast and easily. This will make us realise that those fees are worth paying as they do their job rightfully.

TRONTON

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towards the end of the year many exchanges do that, also happens to exchanges in my country that offer zero fees for USDT transactions (5% reduced to 0%), everyone also understands if it's just a temporary marketing strategy.

There are no significant changes that apply permanently, the business side is still emphasized by increasing the attractiveness of services and periodic events, there is no significant difference and remains the same as digital banks.

Wintersoldier

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Quote from: alani123 on December 13, 2019, 08:27:02 PM

I think that the profit margin might already be quite low for a new exchange. The need for employees grows while profits might never do. Many new small exchanges rely on listing bitcoins to earn profits but this is only a task with diminishing returns as the volumes dry up very soon. Many crypto exchanges in fact close down within their first year of operation... It's easier to open an exchange now with the white label solutions, but to make it innovative and capture insterest is still hard.

What they can do to suffice this is to actually avoid hiring many support and limit their team based on the salary that they have available to offer. As well as choosing the best employees to do the job because a new emerging exchange should possess the characteristic of being efficient in their services and operation. Or else, if they miscalculated, then they will end up closing and stopping their operation without any profits. Because for us traders, what we want are exchanges that offer less transaction fees.

Reatim

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Quote from: alani123 on December 13, 2019, 08:27:02 PM

I think that the profit margin might already be quite low for a new exchange. The need for employees grows while profits might never do. Many new small exchanges rely on listing bitcoins to earn profits but this is only a task with diminishing returns as the volumes dry up very soon. Many crypto exchanges in fact close down within their first year of operation... It's easier to open an exchange now with the white label solutions, but to make it innovative and capture insterest is still hard.

there are some exchange that closes earlier because they entered scamming jobs ,or they are just created for a certain projects to mislead people and victimized investors.
we have seen many of this in the past ,you can find an exchange exclusively operated for a certain ico token and after short time they will vanish together with the developer.so how can they be trusted?
we need lower fees from exchange to attract users but in the end?its their reputation that will let them stay longer.

alani123

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I think that the profit margin might already be quite low for a new exchange. The need for employees grows while profits might never do. Many new small exchanges rely on listing bitcoins to earn profits but this is only a task with diminishing returns as the volumes dry up very soon. Many crypto exchanges in fact close down within their first year of operation... It's easier to open an exchange now with the white label solutions, but to make it innovative and capture insterest is still hard.

Lauren Smith

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Quote from: Rodeo02 on December 13, 2019, 10:45:05 AM

Quote from: Initscri on December 13, 2019, 02:42:01 AM

Quote from: erricducducan26 on December 10, 2019, 02:35:17 PM

The crypto industry has yet to evolve from exchanges which are nothing more than digital banks in reality. A couple are taking bold moves to slash their fees but how many others will follow and how will it affect the wider crypto industry.

https://bitcoinist.com/why-crypto-exchanges-should-drop-their-fees-and-profit-margins/

It's a free market.

If you find an exchange that has their fees dropped. Use it. It will incentivize other companies to do the same.

And the owner of that exchange know how much will be enough fee for them to earn and attractive to users to get more traders.

There are exchnage with low fee bur the questions is if the volume of exchange is enough and how secure that exchange is.

Why would the volume matter? It has nothing to do with trading or withdraw fees. You don't need high volume to trade on an exchange. That's not how it works. You only need volume when its the entire market. A small exchange can do well with a low volume of they give good customer care and run smoothly.

vintages

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I hate to say this but I have to; it is not about all about splashing the fees.
Though I am a big advocate for lower transactions fee in exchange trading and all that but it's a pity that most exchange with lower fee has the worst service; they most likely use lower TX fee to attract customers. So as a user, you will come to realise that you need a good service after all more than lower fee.

Rodeo02

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Quote from: Initscri on December 13, 2019, 02:42:01 AM

Quote from: erricducducan26 on December 10, 2019, 02:35:17 PM

The crypto industry has yet to evolve from exchanges which are nothing more than digital banks in reality. A couple are taking bold moves to slash their fees but how many others will follow and how will it affect the wider crypto industry.

https://bitcoinist.com/why-crypto-exchanges-should-drop-their-fees-and-profit-margins/

It's a free market.

If you find an exchange that has their fees dropped. Use it. It will incentivize other companies to do the same.

And the owner of that exchange know how much will be enough fee for them to earn and attractive to users to get more traders.

There are exchnage with low fee bur the questions is if the volume of exchange is enough and how secure that exchange is.

Eugenar

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Quote from: blckhawk on December 11, 2019, 10:45:38 PM

I think what they aim when some exchanges impose higher fees on lower volume trades is that they force such traders to go higher. In the business sector, you could see that whenever you buy huge, the prices become lower. Such as when you buy items in wholesale/bulk, you get discounts and lower item price than when you buy in smaller amounts. Same principle is applied to their exchange.

Basically, the fees mostly are depending on the rate they've provided no matter how much is the amount that the trader wants to trade. In this case, you can barely see the loss if you are trading a little amount of money rather that utilizing a huge amount of funds, wherein the transaction fees seems to be smaller. In the end, these exchanges still earns allot from traders and I think if we don't want their system, there is allot of exchanges available for us to choose from.

nutella_11

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Quote from: looterrific on December 10, 2019, 08:20:35 PM

Not going to happen to other exchanges. They need another source to in order to provide profit that the trading fee has. Also, greed will always take them. As long as people are content with the fees, they will still have it since having zero fees doesn't really mean that more users will use it and they will have more profit that way.

I fully agree with that. Every cryptocurrency exchange need to be profitable for its founder. But I'm really grateful that some crypto exchanges give a lot of various opportunities for their users which lower fees. Like for example CoinDeal where having some CDL Tokens could lower your fees, this is huge superiority for users in my opinion.

Initscri

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Quote from: erricducducan26 on December 10, 2019, 02:35:17 PM

The crypto industry has yet to evolve from exchanges which are nothing more than digital banks in reality. A couple are taking bold moves to slash their fees but how many others will follow and how will it affect the wider crypto industry.

https://bitcoinist.com/why-crypto-exchanges-should-drop-their-fees-and-profit-margins/

It's a free market.

If you find an exchange that has their fees dropped. Use it. It will incentivize other companies to do the same.

sana54210

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Quote from: erricducducan26 on December 10, 2019, 02:35:17 PM

The crypto industry has yet to evolve from exchanges which are nothing more than digital banks in reality. A couple are taking bold moves to slash their fees but how many others will follow and how will it affect the wider crypto industry.

https://bitcoinist.com/why-crypto-exchanges-should-drop-their-fees-and-profit-margins/

Zero fees? Nah I don't really see that happening. Maybe exchanges will agree to cut their fees by, let's say, half, but to make it a zero fees? That's not going to happen. What you have to know is that these fees are like a source of income for exchanges and they need the money to be able to continue their operation. If they stop the fees and start charging zero for their services, then I wonder where they will get the money to pay their workers and maintain their sites, pay engineers and all that. So they are not going to agree with such an idea.

But the truth is that, whatever you're looking for here , you will always find it. If you need zero fees, since poloniex is offering that, then you should go for it and leave other exchanges. Or if it need fees that is moderate, with better services and security, then there are also those that offer that.

X-ray

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Quote from: ?? on ??

Because. If they want to retain customers and increase their customer base, they need to reduce fees.

There are many exchanges mostly a new exchange that are trying this method to gather as much user as they can but also still failed. It's not just because the fee is cheap people will just switch exchange there are too many factors that need to be considered before switching exchange and the legitimacy of the exchange itself and the proof that they are licensed under the government is one of them. This method of reducing fee to attract customer is not the most efficient method.

Lizzylove1

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I usually do avoid exchanges with high fee, but look at this: If you have less traders with low fee, then they may not last much in the business. Centralized exchanges are very expensive to maintain, they need to be on the latest technology to meet up with security, except they have large volume of trades. But I hate exchange with high fees like LUNO is super expensive in my country.

xiboothrezi

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Quote from: ?? on ??

No fees wouldn't guarantee that it would cause a more loyalty to their investors/traders. Remember that the exchange needs a lot of things to operate, include the server, domain name, etc. They could earn those maintenance cost from the fees coming from their users excluding the mining fees.
Lowering to a reasonable amount is still okay, but having no fees is a no-no.

It is true. I do not mind that, if the fee is comparable to the quality offered by the exchange, including the security and speed of the transaction, that makes me comfortable doing the exchange. After all, we give the fee for using the exchange service, nothing is really free right in this world? so this is a symbiosis of mutualism. And the most important thing here is the excellent service provided by the exchange, with a good system support, responsive to any obstacles, that's what I need the most. After all, we can choose the exchange we want, moreover, the fees are dynamic, so we can choose which is the most effective. I still prefer high fees but good service, rather than free fees but it takes hours to complete each transaction.

Topic: Why Crypto Exchanges Should Lower Their Fees and Profit Margins (Read 899 times)