Understanding Cryptocurrency Transaction Fees and the Lightning Network

Transaction fees for Bitcoin can fluctuate based on network usage, currently averaging around 24 cents, which is negligible compared to traditional money transfer methods like Western Union and Wise.com, where fees typically range from 1% to 2%. The Lightning Network significantly reduces these costs, allowing for transactions that can cost as little as a fraction of a penny due to its channel-based system. This network operates almost like an ATM, facilitating day-to-day payments without the concerns of high fees associated with main blockchain transactions, which are akin to the larger financial systems used by federal banks for inter-state transfers.

Transcript

Play full episode

Remember Everything You Learn from Podcasts

Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.