How Do Crypto Fees Work?

Fees are basically broken down into two parts. The first are the Fees that you pay at an exchange to purchase or send crypto currency. The second are fees that are charged as part of the blockchain that are charged when moving crypto between wallets. At the lowest level, we convert our local currency by sending it to the exchange. (A fee will apply) We then purchase some crypto currency ie Bitcoin, NEO, IOTA etc etc. (A fee will apply) We then send the crypto to a wallet. (Another fee will apply). The first Fee is most likely for the service to move your fiat currency to the exchange, the second is for the exchange and the third is the fee that the blockchain/crypto itself will chew up.

So I hear you saying, if there are so many fees what is the benefit of Crypto Currency… Well at present, there is not a lot of incentive to use it. Most of those holding crypto is for investment purposes. The end goal will be to pay with items directly using your crypto of choice. Thus cutting out the middle-men. We will start to see more of this into the future. However for now this is where we are at. I hope to look back on this blog post in 2-3 years and see that we are making progress towards a system that is easy to access and easy to use.


Check, Double Check and Triple Check your Fees

  • Decide on your payment method and Check Fees.
  • Polipay $3.30 each time is not bad
  • Bpay 2% on some exchanges
  • Check wallet fees and ensure you send enough
  • IOTA = No Fees on transactions

  • Check Exchange fees
  • Coinspot 2% - 3% fee for Transactions
  • BTC Markets 0.85% for Transactions
  • Ensure the value sent is what will be received
  • Triple Check Senders Address



Transferring Fiat Currency to Crypto


Buying a Crypto Miner

In a nutshell ‘Mining’ Crypto Currency is basically verifying transactions on the network or blockchain. This happens to ensure the system remains safe, secure and reliable. The Miners are basically computers that solve a problem to verify that the correct data (or Transaction) has been sent between peers.

There are two ways to get Crypto Currency. One is to ‘Mine’ it. (Using some Mining Hardware) and the other is to purchase it directly. (Using an exchange.) When looking to mine Crypto there are a few variables to take into account. The first is the Crypto Type that you want to mine. Bitcoin for example uses a SHA-256 algorithm and is best mined with ASIC based miners (We will go into ASIC chips later!) Where as the Coin ‘Ethereum’ uses Ethash which is a modified version of SHA and some other protocols to make it ASIC-resistant and easier to verify transactions. In other words you can use your computers Graphics card to mine this coin.

The ASIC miners for Bitcoin and GPU miners for Ethereum are only just the tip of the iceberg, new technologies are coming out all the time which will change how you mine crypto and which hardware you select. Below if a few comparisons to help you make up your mind if ‘mining’ crypto is for you.


Things to consider when purchasing a miner

  • What Crypto am I going to Mine? (Bitcoin, Ethereum, Litecoin)
  • What type of hardware do I require to mine said coin?
  • Is there a calculator to determine my earnings?
  • How much maintenance does a miner require?
  • Do I need an internet connection?

  • Where shall I store the hardware?
  • How much heat will my hardware produce?
  • How noisy is the hardware?
  • How much power will my mining rig use?



Where to Start

First you need to determine the Crypto coin you want to mine. Check and make sure it is ‘mineable’ also. Not all Crypto can be mined. For example, NEO (Chinese Crypto) it is not able to be mined, but has other benefits that is outside the scope of this post. (Google it, very interesting read!) In my case, the first miner I purchased was an ASIC based miner suitable for Bitcoin (SHA-256 capable). I decided upon this because Bitcoin is the most well known of the crypto currencies and I felt at the time that no matter the initial investement amount on the hardware, the price of Bitcoin will still go up relatively quickly.

Power Consumption

We should really hit on the power consumption debate firstly as this is easily the most debated topic when mining crypto. Most of the hardware require a fair bit of power to run. The key is to figure out how much you are paying for power and to weigh this up with the rewards you get from mining your crypto. In some cases (Especially in Australia!) the price of power may not allow you to make mining profitable.

Easily the best Crypto Profitability calculator going around is this one. It will allow you to incorporate your power consumption to give you a more accurate understanding of the potential returns you could make.

Noise and Heat

As with all computer hardware, they generally produce a fair bit of Noise and Heat. Any device that is using upwards of 1000W of power is going to produce heat. A byproduct of this is the use of fans to cool the hardware, which in turn produces noise. Taking this into account you will need to store your mining rig in a suitable location so that you do not over heat the device, and that the constant drone of the fans are not annoying. Checkout the video below. This is an Ebit E9, the first miner that I purchased. Noisy AF!

Where to buy?

Generally purchasing direct from the manufacturer is always a good Idea. My first stop would be to check the Bitmain website to see what is available. They have some of the best ASIC and Litecoin miners going. At present you can’t really beat the Antminer S9 if you want o mine Bitcoin. They sell all the equipment in batches. Thus you may find them to be out-of-stock on a regular basis. Keep checking in periodically to get a good deal.

With regards to GPU miners, All these parts are available at local computer shops. See below for a small spreadsheet outlining some items you could use:

As with all tech, at the time of this post, the prices listed for the gear were pretty competitive. Once this post is 3-4 months old, you will see that other tech has come out which is better spec and a better price.


Crypto: Coinspot.com.au

Ever since 2012 I have been interested in the Crypto Currency market (Yes Bitcoin fascinated me!) however, as like many of us, we thought it was a pipe dream and did not invest in it. I did not even think about putting a cheeky $50 down. In hindsight that was a bit of a mistake. The value of Bitcoin has since gone to the moon! 2010 saw prices sitting below $1, now a single coin is worth approx $7k AUD! ($12k – 27/11/17)

So of course its at this time I decided to do what I should have done years ago! Buy some Bitcoin! or at least some Crypto.  After joining the Crypto Australia group on Facebook and reading through some posts it became clear to me that Coinspot was the most user friendly exchange to get started with. Coinspot is an Australian company operated out of Melbourne Victoria. (That was a win for me, Aussie based company for starters)

For those of you who just skim the page, see below a list of Pro’s and Cons. This will help making up your mind. What I will say quickly though is that this exchange is perfect for the mum and dad investors looking to get a foot in the door!


Coinspot.com.au Pros and Cons

  • Ease of Use
  • Suitable for First Time Buyer
  • User Friendly Interface
  • Crypto Delivered Almost instantly

  • Built In Wallet to Hold your Crypto
  • PoliPay, Bpay and Cash Deposit
  • Secure 2Factor Authentication
  • Identity Validation Completed quickly

  • High Fees (2% for Crypto Transactions)
  • Limited Selection of Coins (However getting better!)
  • Charting is basic (Good for first timers)



A more in Depth look at Coinspot

So you have decided to take the plunge into the Crypto world and you have decided to use Coinspot for your first exchange of Fiat currency into Crypto Currency. See below some more in depth info to help you get started.

Sign Up and Verification

The first step is to sign up for an account on coinspot and go through the verification process. Some might be hesitant to hand over a lot of personal information, however I do believe this added step in security only benefits the members and the community. It makes it just that little bit harder for the scammers and crims to also be involved. Some of the verification steps will require you to scan and send your drivers license, a verification photo holding a handwritten sign, and a copy of a utility bill to confirm address. This is all completed and sent to Coinspot via the secure portal they provide. I submitted my verification on a Sunday morning and it was verified that night. They even gave me a phone call to confirm that I had not given them an incorrect phone number. Once verified you are good to go to buy your first crypto.

TIP - Enable two-factor authentication on your account and get the google Authentication App on your phone. It adds an extra layer of security to your account. When dealing in Crypto and $$ you should go to this effort. It may save you later on. Especially if your portfolio grows.

Buying your first Coin

You will now be required to make a deposit into your account. Coinspot has 3 methods. PoliPay, Bpay and Cash Deposit. Polipay has the lowest Fees at $0, Bpay @ 2% and Cash Deposits at 3%. Cash Deposits are via BlueShyft which you can complete at many Newsagents around the country. At first you will be limited to $2000AUD per day. However once you have gained some “purchase experience” the cap will be raised to $10,000AUD.

No matter how you get your AUD into the exchange it will then show up as a Balance that you can use to purchase Crypto.

Now that You have a Balance in the exchange you can purchase your first Crypto. Click on the “Buy” button in the top menu, and select how much you want to purchase. Either the Crypto amount or how much you want to spend of your Balance. Click buy and you will be greeted with a summary page. This will list the fees for your transaction. Take note of the 2% fee. Once purchased it will take a few minutes, but you will see the balance pop up in the wallet of the coin you purchased.