Transaction fees and everything about it

Imagine you have a magic wallet that can store different types of magical coins from various magical lands. Each magical land has its own unique way of handling and transferring these coins, and they all charge a small fee for their services. Let’s explore some of these magical lands and how they handle their coin transfer fees.

  1. Ethereum Land: In Ethereum Land, they use a special resource called “gas” to transfer their magical coins. Gas is like fuel for the magical creatures that help move coins from one wallet to another. The more gas you provide, the faster your coins will move. The fee you pay depends on how much gas you use and how busy the magical creatures are.

  2. TRON Land: In TRON Land, you need two resources: “bandwidth” and “energy.” Bandwidth determines how many coins you can transfer at once, while energy helps process the magic spells required for the transfer. These resources replenish over time, but if you don’t want to wait, you can pay a small fee in TRON coins to speed up the process.

  3. Bitcoin Land: Bitcoin Land uses “miners” to transfer coins between wallets. Miners are magical creatures that solve complex puzzles to keep the network safe and secure. To motivate them, you pay a small fee in Bitcoin for their services. The more you pay, the more likely they will prioritize your transfer.

Remember, each land has its own way of handling fees, but they all help keep their networks running smoothly.

Now let’s expand the topic a bit and talk more specifically about blockchains:
What is Native token?
A native token is a cryptocurrency that is inherent to a specific blockchain network and is used primarily within that network. Native tokens serve various purposes within their respective ecosystems, such as paying for transaction fees, participating in network governance, or accessing specific features and services.

For example:

  • Ether (ETH) is the native token of the Ethereum blockchain and is used to pay for transaction fees (gas) and interact with smart contracts on the Ethereum network.
    In this case we have already published an article about what you need to know about Ethereum gas fees, which you can access from the link below:
    Gas limit and gas price in the Ethereum network

  • Bitcoin (BTC) is the native token of the Bitcoin blockchain and is primarily used as a store of value and a means of peer-to-peer transactions on the Bitcoin network.

  • TRON (TRX) is the native token of the TRON blockchain and is used for staking, voting, and accessing various features and services on the TRON network.

-Klever(KLV): is the native token of the Kleverchain and is used for staking, voting, and accessing various features and services on the Kleverchain.

Native tokens are essential to the functioning of their respective blockchain networks, as they provide the means for users to participate in network activities and access the benefits and services offered by these ecosystems.

Transaction fees play a significant role in the world of cryptocurrencies, as they facilitate network operations by providing incentives to miners or validators who process and confirm transactions.

A transaction fee is a small amount of cryptocurrency paid by the user initiating a transaction to compensate network participants for their efforts in validating and processing the transaction. Transaction fees help prioritize transactions in a blockchain network, as miners or validators typically prioritize transactions with higher fees to maximize their earnings.

In most blockchain networks, users can manually set the transaction fee they’re willing to pay, which can impact the speed at which their transaction is processed. Higher fees usually result in faster confirmation times.

ERC20 vs TRC20 Transaction Fees

ERC20 and TRC20 are token standards used on the Ethereum and TRON blockchain networks, respectively. These token standards provide a common set of rules and functions for creating and managing tokens, making it easier for wallets, exchanges, and other applications to interact with them.

ERC20 Transaction Fees: ERC20 tokens are created and managed on the Ethereum blockchain, which uses a Proof-of-Work (PoW) consensus algorithm and requires “gas” for transactions. Gas refers to the amount of computational effort needed to execute specific operations on the Ethereum network, including token transfers. Users pay gas fees in Ether (ETH), the native cryptocurrency of Ethereum. Gas fees can fluctuate depending on network congestion, the complexity of the transaction, and the gas price set by the user.

TRC20 Transaction Fees: TRC20 tokens are built on the TRON blockchain, which uses a Delegated Proof-of-Stake (DPoS) consensus mechanism and requires “bandwidth” and “energy” for transactions. Bandwidth represents the transaction capacity of a TRON account, while energy is a separate resource required for executing smart contracts. Unlike Ethereum, TRON’s bandwidth and energy regenerate over time, and users can freeze TRX, the native TRON token, to obtain additional resources. However, transactions can also be executed with a minimal fee in TRX if users don’t want to freeze their tokens.

In summary, transaction fees are essential for maintaining and securing blockchain networks. The main difference between ERC20 and TRC20 transaction fees lies in the resources required for transactions on their respective networks – Ethereum uses gas, while TRON requires bandwidth and energy, with the option to pay minimal fees in TRX.

We have made it possible in Klever for you to interact with different blockchain networks and create a better management for paying the transaction fees of this network.