With the recent increase in fees for both Bitcoin and Ethereum, this is a question coming by more recently. So let’s dive right in.
To first cross off the top cryptocurrencies — Bitcoin’s average transaction fee is $25.47 as of writing, with a “near finality time” of 58 minutes before your transaction is considered fully confirmed. Ethereum fares slightly better with a $24.48 average transaction fee, and a 6 minute near finality time.
See more: Blockchain with lowest transaction fees
So with these two out of the running, let’s look at what the actual lowest fee cryptocurrencies are.
As no one who is in crypto will be surprised to hear, Nano takes the cake here. Nano is a cryptocurrency with zero fees, relying on Open Representative Voting for consensus and security. To be clear, the zero fees are not due to some temporary subsidy — zero fees are built into the protocol. In addition to having the lowest fees, Nano also wins out in the time it takes to confirm a transaction clocking in at 0.14 seconds. Yes, that’s sub-second, for irreversible, full confirmation by a decentralised network. Because transactions can never be reversed in Nano and because its consensus mechanism is so secure, even exchanges consider it confirmed after that first second. To top it off, Nano has no inflation, so your holdings aren’t being constantly diluted as in many other cryptocurrencies.
Clocking in as a good second is Digibyte (DGB). Digibyte is a PoW coin, but uses a combination of 5 different mining algorithms compared to Bitcoin’s one. This helps avoid centralization in mining. Its fees are quite low, while its confirmation time is relatively long on the exchanges where it’s listed because while a new block is mined every 15 seconds in DGB, exchanges require 20 confirmations before considering it settled. That being said, DGB does still have 8% inflation, meaning that while fees are low, your holdings will become worth less over time.
Bitcoin SV (BSV) is a bit of an odd one out. Being a fork of Bitcoin Cash, Bitcoin SV increased the block size to be able to process more transactions. In terms of fees, this seems to have worked out since a $0.00055 fee is relatively low. However, the chain is seen as so insecure and open to being 51% attacked that many exchanges have delisted it. Before delisting, it required a whopping 1008 confirmations at 10 minutes per block, for a settlement time of 7 full days. There’s also about 3% inflation to contend with, diluting your BSV holdings.
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XRP is the coin that everyone loves to hate. The wider crypto community sees it as a centralized coin, and it’s currently charged by the SEC with conducting an unregistered securities offering. All that being said, it does offer a low-fee option at an average $0.00078 fee, and takes only 4 seconds to be considered confirmed by an exchange. The worst aspect of XRP is that its supply is still being diluted massively, with about half of all XRP still in escrow to be distributed by a for-profit company.
A fork of Bitcoin, Bitcoin Cash (BCH) aims to be the true vision of Bitcoin, being peer to peer digital cash. Fees on BCH are obviously much lower than on Bitcoin, owing to BCH being able to handle more transactions in a single block. BCH accomplishes this by having larger, variable blocks (starting at 8MB, versus BTC’s fixed 1MB). Bitcoin Cash’s downside is that the security of the chain is seen as low. Kraken requires 15 confirmations or 150 minutes to consider a deposit confirmed, while Crypto51 sees the 51% attack cost for BCH as just $8500 an hour.
Stellar is like XRP in many ways. Transactions are cheap and fast, though costs will go up if Stellar’s price increases. Stellar is more of a platform, allowing, for example, stablecoins to be used on the network. There are some worries over its supply, with approximately 20 billion “Lumens” still in the hands of the Stellar Development Foundation, and over the low amount of validators (nodes) being run. All that being said, Stellar is one of the few cryptos that Kraken accepts with a single confirmation.
Dash is yet another coin in this list that is a fork of Bitcoin. Started as a privacy coin, Dash nowadays positions itself more as a general medium of exchange. As opposed to Bitcoin’s proof of work protocol, Dash uses proof of stake with “Masternodes” and a treasury, causing people to be worried that the early movers get most of the mining rewards, leading to further centralization overtime. However, Dash’s fees are quite low at $0.0043 on average, though it does take 15 minutes to be considered confirmed by Kraken.
Yet another fork of Bitcoin, Litecoin was one of the first cryptocurrencies after Bitcoin. Its biggest change was 2.5 minute blocks (compared to Bitcoin’s 10 minute blocks) allowing it to scale slightly better, and to keep fees lower. At $0.041 average fee it’s still not exactly cheap though, and Kraken requires 12 confirmations (30 minutes) before they feel safe enough to accept your deposit.
An odd coin, Monero doesn’t focus on being a regular cryptocurrency, but focuses on privacy. The community has the cypherpunk ethos of full privacy for everyone, and is okay with sacrificing some speed and fees to accomplish this, meaning you’ll have to wait at least 30 minutes for Kraken to accept your deposit. The focus on privacy has some clear advantages, but has also caused some exchanges to delist Monero. It’s an exciting project, but no one would use it as the lowest fee option.
Many fees, much wow. Despite being a great meme, Doge clearly isn’t meant to be an actual payment cryptocurrency. It’s $0.239 average fees put it at the higher end of transaction fees, while it would also take 20 minutes before an exchange feels secure enough to consider your deposit valid. This was never the point of Doge though, with its 10% inflation indefinitely it was always meant to be a joke coin. At that, it has succeeded brilliantly, with the Shiba Inu as its very recognizable prime barker.
Honorary mention but excluded:
Avalanche. At the time of writing, Avalanche was having problems on its mainnet causing it to stop completely. As I write this, there hasn’t been a transaction validated in 6 hours. Supposedly it’s very fast, but right now there are still issues.
IOTA. While IOTA promises feeless (though this is unclear lately) and quick transactions, up to now IOTA can only function using a central coordinator. It is not yet a decentralised network, and it’s hard to test its true speed. It has a 79% confirmation rate within 10 minutes, with transactions dropped occasionally.
In the end, my comparison confirmed what I had expected beforehand, which is that Nano is both the fastest cryptocurrency, and has the lowest fees. I’ve written an article about Nano earlier, so if you want to confirm for yourself that it really is that fast, head over there to see people using it and to see how you can try it out for free yourself.
Thanks for reading, comments and feedback much welcome.
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