With the recent increase in fees for Bitcoin and Ethereum, this is a question that has been coming up more recently. So, let’s dive right in.
To first cross off the major cryptocurrencies – Bitcoin’s average transaction fee is $25.47 at the time of writing, with a “near-finality time” of 58 minutes before your transaction is considered fully confirmed. Ethereum fares slightly better with an average transaction fee of $24.48 and a near-finality time of 6 minutes.
So with those two out of the market, let’s see which cryptocurrencies have the lowest actual fees.
1. Nano: $0 fees, 0.14 seconds to confirmation
As no one in crypto will be surprised to hear, Nano takes the cake here. Nano is a fee-free cryptocurrency, relying on Representative Voting Opportunity for consensus and security. To be clear, the zero fees are not due to any temporary subsidy – zero fees are built into the protocol. In addition to having the lowest fees, Nano also wins in the time it takes to confirm a transaction, clocking in at 0.14 seconds. Yes, that’s under a second, for irreversible and complete confirmation by a decentralized network. Because transactions can never be reversed on 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 its holdings aren’t constantly being diluted like many other cryptocurrencies.
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2. Digibyte: $0.0005 fee, 5 minutes to confirm
A good second is Digibyte (DGB). Digibyte is a PoW coin, but it uses a combination of 5 different mining algorithms compared to Bitcoin. This helps it avoid convergence in mining. Its fees are quite low, while its confirmation time is relatively long on the exchanges it is listed on because while a new set is mined every 15 seconds on DGB, exchanges require 20 confirmations before it is considered liquidated. That said, DGB still has 8% inflation, which means that while the fees are low, your assets will be worth less over time.
3. Bitcoin SV: $0.00055 fee, 7 days to confirm.
Bitcoin SV (BSV) is a bit of an oddball. As a fork of Bitcoin Cash, Bitcoin SV has increased its pool size to be able to process more transactions. In terms of fees, this seems to have worked, as a fee of $0.00055 is relatively low. However, the network is seen as so insecure and prone to 51% attacks that many exchanges have delisted it. Before it was delisted, it required a staggering 1,008 confirmations at 10 minutes per pool, for a settlement time of 7 full days. There’s also around 3% inflation to contend with, diluting your BSV holdings.
4. XRP: $0.00078 fee, 4 seconds to confirm.
XRP is the coin that everyone loves to hate. The broader crypto community views it as a centralized currency, and it is currently being charged by the SEC with conducting an unregistered securities offering. That said, it offers a low-fee option at an average fee of $0.00078 and takes just 4 seconds to be confirmed by an exchange. The worst part about XRP is that its supply is still being massively diluted, with around half of all XRP still in escrow to be distributed by a for-profit company.
5. Bitcoin Cash: $0.0024 fee, 2.5 hours to confirm.
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 Bitcoin, due to BCH being able to handle more transactions in a single set. BCH achieves this by having larger and variable blocks (starting at 8 MB, versus BTC's fixed 1 MB). The downside to Bitcoin Cash is that the security of the network 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 per hour.
6. Stellar: $0.004 fee, 4 seconds to confirm.
Stellar is like XRP in many ways. Transactions are cheap and fast, although costs will rise if the price of Stellar increases. Stellar is more of a platform, allowing, for example, stablecoins to be used on the network. There are some concerns about its supply, with approximately 20 billion “Lumens” still held by the Stellar Development Foundation, and about the low number of validators (nodes) in place. That said, Stellar is one of the few cryptos that Kraken accepts with a single confirmation.
7. Dash: $0.0043 fee, 15 minutes to confirm.
Dash is yet another coin on this list that is a Bitcoin fork. Started as a privacy coin, Dash today positions itself more as a general exchange medium. Unlike Bitcoin's proof-of-work protocol, Dash uses proof-of-stake with “Masternodes” and a treasury, causing people to worry that the early adopters will get the best portion of the mining rewards, leading to better convergence. with time. However, Dash fees are quite low, at $0.0043 on average, although it takes 15 minutes to be considered confirmed by Kraken.
8. Litecoin: $0.041 fee, 30 minutes to confirm.
Yet another fork of Bitcoin, Litecoin was one of the first cryptocurrencies to follow Bitcoin. Its biggest change was its 2.5-minute blocks (compared to Bitcoin’s 10-minute blocks), allowing it to scale a bit better and keep fees lower. The average fee of $0.041 still isn’t exactly cheap, and Kraken requires 12 confirmations (30 minutes) before they feel safe enough to accept your deposit.
9. Monero: $0.0696 fee, 30 minutes to confirm.
A strange coin, Monero does not focus on being a regular cryptocurrency but focuses on privacy. The community has the cypherpunk ethos of total privacy for everyone and is very keen on sacrificing some speed and fees to achieve this, which means you will have to wait at least 30 minutes for Kraken to accept your deposit. The focus on privacy has some clear advantages, but it has also caused some exchanges to delist Monero. It's an exciting project, but no one would use it as the lowest fee option.
10. Doge: $0.239 fee, 20 minutes to confirm.
Lots of fees, lots of wow. Despite being a great meme, Doge was clearly not meant to be a real payment cryptocurrency. Its average fees of $0.239 put it at the upper end of transaction fees, while it would also take 20 minutes before an exchange felt secure enough to consider your deposit valid. This was never the point of Doge, though, with its 10% inflation indefinitely, it was always intended to be a joke coin. In that, it has been a resounding success, with the Shiba Inu as its main recognizable barker.
Honorary mention, but excluded:
Avalanche. At the time of writing, Avalanche was having issues on its mainnet, causing it to completely shut down. As of this writing, there hasn’t been a single validated transaction in 6 hours. Supposedly, that’s pretty fast, but right now there are still issues.
IOTA. While IOTA promises fast (although this is not evident lately) and fast transactions, so far IOTA can only function using a central coordinator. It is not yet a decentralized network and it is difficult to test its true speed. It has a 79% confirmation rate within 10 minutes, with transactions occasionally dropping.
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Final Thoughts
In the end, my comparison confirmed what I had expected beforehand, that Nano is the fastest cryptocurrency and has the lowest fees. I have written an article about Nano before, so if you want to confirm for yourself that it is indeed fast, head over there to see how people use it and how you can try it for free.
Thanks for reading, Reviews and feedback very welcome