What are network fees? : Trust Wallet Support

Demystifying Network Fees: What They Are and Why They Matter

Network Fees, also referred to as transaction fees, are integral to the functioning of blockchain networks. Every cryptocurrency transaction—whether it involves sending assets to another address or trading on an exchange—requires the payment of these fees.

The fee structure varies depending on the blockchain network being used. For instance, Bitcoin transactions incur fees distinct from those on Ethereum, Litecoin, or Bitcoin Cash. Additionally, some tokens require a secondary "gas" token to facilitate transactions.

The Purpose of Network Fees: Keeping Blockchains Functional

Network fees play a pivotal role in ensuring the seamless operation of blockchain networks. When a transaction occurs, it is verified, grouped, and recorded in a digital ledger called the blockchain through two primary mechanisms:

Proof-of-Work (PoW):
In PoW-based blockchains like Bitcoin, miners validate transactions and add them to a new block. For their effort, they receive rewards in the form of cryptocurrency and transaction fees.
Proof-of-Stake (PoS):
PoS-based blockchains reward validators for confirming transactions and adding them to the blockchain. These validators are compensated with the transaction fees from the block they validate.

Trust Wallet recognizes the importance of these fees but does not collect them—these fees go directly to the miners or validators.

Note: Network fees are essential for maintaining the blockchain's security and ensuring transactions are processed efficiently. Without them, the network could be compromised.

How Network Fees Are Calculated and Tips to Optimize Costs

Network fees are dynamic, fluctuating based on factors such as:

Market Demand: High network activity leads to increased fees.
Transaction Size: Larger transactions (measured in kilobytes) cost more.
User Priority: Paying a higher fee often ensures faster transaction confirmation.

For instance, Bitcoin fees are calculated based on transaction size. SegWit (Segregated Witness) transactions are generally cheaper due to reduced data size. Similarly, Ethereum fees depend on "gas prices," which can be tracked using platforms like ETH Gas Station.

How Network Fees Are Calculated

Note: Trust Wallet automatically sets an optimal fee based on network conditions. However, users can manually adjust these fees to suit their needs. Paying a lower fee may delay transaction confirmation.

Additional Resources for Calculating Network Fees

Here are some tools to help you estimate and manage network fees:

Stay updated with the latest Trust Wallet version to access advanced features and optimal transaction settings:
Download Trust Wallet.