What I learned diversifying cryptocurrencies in small volumes: beware the fees!

in cryptocurrencies •  7 years ago 

So, at the end of 2017, given the massive rise in Bitcoin over the year, my theory as a newbie went like this:

"I know, I'll buy a few coins of a large number of lesser-known altcoins whose price is really tiny. It's a gamble, but if just one of those coins shoots up to be worth say $1000, then that'll be something!"

And so off I went to CoinSpot purchasing 10 of this coin, and 20 of that - I was happy to spend up to $20 worth of real cash, per coin, and spread it out over a large number of low-price altcoins (e.g. worth less than $1).

I tried to buy only those which were supported by the multi-currency crypto wallets (e.g. Coinomi, Jaxx, Exodus etc.) just for ease of storage.

But in doing this I learned something: the transaction fees the exchanges charge can be quite high!

E.g. For BAT I'd purchased 20 coins, but the transaction fee to Send was 6 coins! Hence, only 14 coins made it to my Coinomi wallet.

Moral of the story: if you're out to spend small quantities, before purchasing them on the exchange of your choice, check what the transaction fee is for sending that coin off the exchange.

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