Which chain has the lowest transaction fee? What decides?

At present, the main blockchains commonly used in the market are Ethereum (ERC-20), Tron (TRC-20), Omni Layer (Bitcoin network), etc., and transactions on these blockchains usually require a certain fee. However, the handling fee of different networks varies greatly, and users can choose the most suitable network for transfer according to their needs. In order to save costs, some investors will pay special attention to the blockchain transaction fee, which chain has the lowest transaction fee? According to the current data analysis, the transaction fee of TRC-20 network is relatively low. Let's talk about it in detail.

 Which chain has the lowest transaction fee?

The TRC-20 network fee is relatively low, and the fee is the fee paid to the network or service provider when making a fund transfer. For cryptocurrencies, transfer fees are primarily paid to miners or validators in the blockchain network to incentivize them to process and confirm transactions. The following is an analysis of common handling fees:

1. ERC-20 (Ethereum network): The fee is high, usually between a few dollars and dozens of dollars, depending on the congestion of the Ethereum network and the gas price. The Ethereum network is widely used, has good compatibility, and supports more exchanges and wallets. The fee is high, and the confirmation time may be long when the network is congested.

2. TRC-20 (Tron network): The handling fee is low, usually a few cents to a few dollars. Low handling fees, fast transfer speed, suitable for frequent small transactions. The compatibility is not as good as ERC-20, and some exchanges and wallets do not support it.

3. Omni Layer (Bitcoin Network): The fee is high, usually between a few dollars and tens of dollars, depending on the congestion of the Bitcoin network and the size of the transaction. Using the Bitcoin network, it is highly secure. The fee is higher, and the transfer confirmation time is longer.

 What determines the blockchain fee?

Blockchain fees are mainly determined by the congestion of the network, the consensus mechanism of the blockchain, the complexity of the transaction, and the supply and demand of the market. Here's an analysis of the specific causes:

1. The congestion of the network: When there are a large number of transaction requests on the blockchain network, the network will become congested, and transactions need to compete for limited block space. At this time, users often increase transaction fees in order to speed up transaction processing.

Different blockchains have different block sizes. For example, Bitcoin has a maximum block size of 1MB, while Ethereum's block size is determined by the gas limit. When the block size of the blockchain network is close to the maximum, the fee tends to rise.

 2. The consensus mechanism of the blockchain

Proof of Work (PoW): For example, in Bitcoin and Ethereum 1.0, miners use computing power to solve math problems to package transactions and earn rewards. The level of the fee is related to the number of transactions processed by the miner, and when the network is busy, the miner prioritizes the transaction with the higher fee.

Proof of Stake (PoS): For example, Ethereum 2.0 and Cardano, validators participate in block packaging by holding tokens. While the transaction fees of PoS systems may be lower than those of PoW, they can still be affected by network congestion and validators opting for high-fee transactions.

3. The complexity of the transaction: the transaction fee for simple transfer transactions is lower, while the transaction involving the execution of smart contracts (which needs to consume more gas (in Ethereum), so the transaction fee is higher. In the Ethereum network, users can set the price of gas they are willing to pay (in Gwei), and each operation has a certain gas consumption. The higher the complexity of the transaction, the more gas will be consumed, so the fee will increase accordingly.

4. Supply and demand in the market: When the trading volume of certain projects or tokens increases, such as the launch of ICOs and DeFi projects, more transaction demand will be generated on the network, resulting in an increase in fees. The overall sentiment of the market, such as a bull or bear market, can also affect the frequency of trading. For example, during a bull market, a large number of users participate in trading, which may lead to network congestion and higher fees.

 How to calculate the transaction fee on the blockchain?

The formula for calculating the handling fee is: handling fee = trading volume * transaction price * handling fee rate

OKX's trading fees are calculated as a percentage of trading volume, with the lowest fee being 0.02% and the highest fee being 0.15%.

For example, if you trade 100 bitcoins at a price of $10,000, the fee you need to pay is: 100 * 10,000 * 0.02% = $20. In addition, OKX offers a discount mechanism that allows users to get discounts based on their trading volume, reducing fees.

While transaction fees are generally kept reasonably low for most blockchains, fees can spike when network traffic is high. For investors, the transaction fee paid affects whether the transaction can be added to the next block first, and the higher the fee paid, the faster the transaction will be confirmed. However, if investors want to reduce fees, they can choose to trade when the network is not congested, or use a Layer 2 scaling solution.

The above is the blockchain transaction fee, which chain transaction fee is low? What decides? For more information about the introduction of blockchain fees, please pay attention to other related articles of Script House!