Major bitcoin exchange Kraken has raised withdrawal fees to 0.0025 BTC, just under $7 at current prices, citing the value as its average cost of network fees per transaction.
San Francisco-based bitcoin exchange Kraken, among the world’s largest cryptocurrency exchanges by volume, has told customers via email about the change in bitcoin withdrawal fees.
Why the change? Kraken always pays a miner fee that is sufficient to ensure transactions are processed quickly. However, the average miner fee required to prioritize and confirm Bitcoin transactions has been increasing for some time without a corresponding increase in the fee we charge to clients.
When a bitcoin transaction is broadcasted to the network, there is a fee attached to incentivize miners to include that transaction into their next mined block. The higher the attached fee, the higher the likelihood of a miner including the transaction to their block.
Kraken adds that the new updated withdrawal fee it will now charge customers is closer to the miner fees it sees. The exchange notes that the actual miner fee could be higher or lower, stating:
Note that the fee is static and represents our average cost per transaction, so the fee may not match the actual miner fee we pay in every case.
Data from Blockchain.info shows that bitcoin miners are getting paid more than ever, with over $1.8 million a day in miner fees.
An increase in network activity and the rise in network fees have seen other bitcoin companies like Xapo, carrying over the miner fee to its users for outbound transactions.
“Due to the increase in transaction volume of the bitcoin network, we’d like to give our users some control over their transactions. That being said, Xapo will give you the ability to select which type of fee you’d like to pay – a standard or high priority fee- thus allowing you to choose how quickly you’d like for your transaction to be processed,” Xapo wrote in an email to customers.
While presently opting for a straight fee structure, Kraken adds that it too would switch over to a dynamic fee model.
“In the near future network fees for bitcoin (and possibly other tokens if needed) will be updated dynamically to better match the fee to our costs.” Kraken stated.
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Last modified: June 10, 2020 2:15 PM UTC