⛏️What Are Miner Fees And Why Do I Need To Pay Them?

All transactions that take place over the blockchain require a miner fee to be attached in order to incentivize the network to process the transaction. More so, miner fees are charged on bitcoin, ethereum, and “the vast majority of blockchains” for all transactions. 100% of the fee goes to miners or validators (the computers securing the network, not ShapeShift).

Since the network can only process a limited number of transactions per second, transactions with a higher miner fee are prioritized over those with a lower miner fee. During times of blockchain congestion (often coinciding with market volatility), fees can skyrocket because with limited block sizes, the only way to be included in the next block is to outbid everyone else.

Network congestion can vary and can increase the time it takes for a transaction to be confirmed. This can cause wait times of hours or even days for transactions with an insufficient miner fee attached. To avoid this, ShapeShift charges a flat miner fee for every transaction we facilitate regardless of the size of the transaction. This miner fee ensures that our users are able to receive their funds as quickly as possible without experiencing delays due to network congestion. However, we do keep an eye on the best miner fee and update the fee to reflect the network conditions. You can see all our current network activity and average fees here.

Without a limited block size and a mechanism such as miner fees to determine who is included in each block, blockchains could grow so large in size that it would be prohibitively expensive for the average individual to run a node, leading to a smaller number of miners (most likely institutions) and decreasing decentralization of the network.

Miner fees are displayed before you broadcast your transaction. ShapeShift does not charge any additional fees on top of the network fee when sending a transaction. While these fees are dynamic, they are preset and there is no way to set customized miner fees at this time.

It is important to note that anytime you are sending ETH or an ERC20 token, there must be a sufficient balance of ethereum (ETH) in your wallet to cover the cost of gas (another name for transaction fees). If you do not have enough ETH to cover this cost, you will not be able to send the asset. This applies to all crypto wallets and even when claiming airdrops.

If you need to purchase some ETH, you can do so directly in our app via Gem. Instructions on how to do so can be found here.