Why Do Crypto Transactions Sometimes Cost More Than the Amount Sent?

Crypto is often associated with cheap, fast, and borderless transactions. Therefore, finding ourselves suddenly paying astronomical fees just for sending a little money seems to make no sense. It may happen, though. One day, you might want to transfer just $5 worth of coins and discover that the network fee costs two or three times more than the payment itself. Yikes. Why does this happen at all?

Well, the thing is that most crypto networks don’t have limitless capabilities. Each block in a blockchain, for example, can only hold a certain number of transactions. For this reason, fees are also necessary: ​​they prevent malicious actors from making worthless transactions simply for the sake of it (spam). Let’s see more of this.

Why Do Crypto Fees Become Expensive?

There’s usually a very specific reason plastered across headlines, but in general, it’s because too many people are using the network at the same time. A useful concept here is TPS: transactions per second. Every crypto network and payment processor has its own TPS capacity. Bitcoin (BTC) has 3-7 TPS at the moment. Ether (ETH) processes 15-30 TPS. Polygon offers up to 1,000 TPS; BNB is over 4,000 TPS, and Visa handles over 83,000 TPS.