Transaction Fee
By CoinGecko | Updated on Mar 03, 2020
Time and resources are required in order for miners and validators to hash and sign a block on the blockchain, a transaction fee the the blockchain users is an incentive mechanism for the miners and validators to contine playing their role and securing the network with computational powers.
Transaction fees are usually nominal and free-market based, where users can set the amount of fee they are willing to pay and the miners able to set the preference for which transaction to mine and reward from until an equilibrium is met.
Related Terms
BUIDL
An advice for investors to contribute new projects on blockchain rather than holding cryptocurrencies and waiting for the price to increase
Leverage
It is an investment strategy to gain potential return of the investment by borrowing the money
Cold Storage
Offline storage of cryptocurrencies which is arguably safer as they also require physical access (eg. hardware wallet, paper wallets)
Liquidity
The ease of which cryptocurrency can be bought and sold without impacting the overall market price.
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