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Credit cards must also be physically stored and kept secure. Technology is improving, but the card numbers are easy for hackers to steal, especially if you allow merchants to store them for easy future access. Even if you don't, hackers can access merchant's records and steal card information. Bitcoin transactions are made using a public key—an anonymous alphanumeric address that changes with every transaction—and a private key. You can also pay on mobile devices using quick response QR codes linked to your wallet.
Credit cards can also be used on mobile devices, but the payments have to go through several entities before they are processed and approved. One of the key differences between the two is that often you hand your card to another person or swipe it in a point-of-sale terminal. These machines can be hacked, and simulated terminals can send your card information to hackers. An untrustworthy cashier can keep your credit card information, sell it online, or use it themselves.
Bitcoin comes straight from your digital wallet and goes directly to the party you're paying, without a way to intercept the information. Bitcoin transactions are irreversible and can only be refunded by the receiving party—a key difference from credit card transactions that can be canceled.
This means there are no charge-backs for merchants when taking payment via Bitcoin. A charge-back is the demand by a credit-card provider for a retailer to cover the loss on a fraudulent or disputed transaction. Merchants that accept Bitcoin also save on credit card fees; fees can range anywhere from 0. Bitcoin payments can be sent and received at either very low cost or none at all, as Bitcoin fees are based on the amount of data sent or the wallet you use.
While credit card transactions have many parties involved, they only take a few seconds to complete. On the other hand, Bitcoin transactions can take 10 minutes or more based on network activity and the network's current hashrate.
For merchants, the advantages of receiving Bitcoin are apparent. Payments made using the digital currency save substantially on processing fees and eliminate the risk of charge-backs. For shoppers, the advantages of paying with Bitcoin include greater simplicity in placing the transaction; users are anonymous, there are no interruptions from intermediaries, and transaction fees are low.
Credit cards offer other features, such as borrowing money and reward points. They are also accepted by many more merchants and vendors. However, using credit cards carries the risk of incurring late fees, interest charges, foreign transaction fees , or potentially affecting your credit score. Which you choose depends on your preferences for fraud protection, ease of use, anonymity, and personal beliefs about cryptocurrency and existing financial infrastructures.
A crypto rewards credit card is a credit card that gives cryptocurrency as a reward for using it to purchase goods and services. Bitcoin is very difficult to hack, public and private keys can be lost or accidentally deleted. Credit cards and numbers can be stolen or lost, but fraudulent activity is generally protected by the issuer. Both have their safety concerns. If your card issuer allows you to use it for this purpose, then yes.
However, you assume significant volatility risk—the risk of Bitcoin prices dropping and causing large losses—if you use a credit card to purchase cryptocurrency. Buying cryptocurrency on credit is the same thing as taking out a loan to go gambling—chances are you'll lose more than you win. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions.
Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author does not own Bitcoin. Personal Finance. Your Money. Your Practice. Popular Courses. Table of Contents Expand. Table of Contents. Bitcoin vs. Credit Card Transactions. Bitcoin Transactions. Key Differences. Frequently Asked Questions. Cryptocurrency Bitcoin. Part of. Many new investors are surprised, however, to learn there are costs to using digital cash, including unexpected fees.
Below are some frequently asked questions. Crypto fees are essentially processing fees built into the networks that maintain bitcoin and other cryptocurrencies. In addition, third-party services like exchanges, trading apps and ATMs charge their own fees.
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Dow Jones. By Paul Vigna.
The fee is distributed in several ways:. In other cases, like with NEO , the network fee is not taken due to another protocol and network rules. The network fee payment conditions depend on each blockchain technology.
Bitcoin miners can pick the transaction they want to include to the blockchain and get a reward for each block mined. Therefore, the higher the network fee is set, the bigger the reward and the higher the priority of the transaction. Miners are interested in the transaction sized because they can create only the blocks up to 1,, bytes. Gas is a unit that measures the amount of computational effort that it will take to execute certain operations.
The heavier your smart contract is, the more Gas you need. But when it comes to sending tokens, it requires to perform a heavy contract, much more Gas is needed it can be , Gas or even more. This is an average price, however, usually much less Gas is required, so the user pays a lower network fee and the difference just stay on his or her address.
XRP is a Peer-to-Peer system that works by consensus. Then each validator creates its own unique node list UNL and votes on the accuracy of all transactions. Each transaction requires an average fee of 0. Your support helps us build a stronger and convenient platform.
A lot of interesting features are coming soon! We also have a YouTube channel with crypto video guides and news. Follow Atomic Wallet on social media for future giveaways and updates. Our cryptocurrency exchange has been designed to ensure that there will never be any congestion that could add to the processing times for your trades. All that we ask is that you provide us with some simple personal information like your name, email address and mobile number.
This is all part of our know-your-customer KYC procedure. Such a procedure is put in place for your online safety. Our Zeply wallet can be used completely free of charge. You need to use a wallet to store the private keys that keep each cryptocurrency secure. This is because we implement a special two-factor authentication process which ensures that only you get to access your account. This will be made available free of charge and it means that you can enjoy convenient mobile trading at the lowest fee crypto exchange.
We even let you buy crypto with credit card , and we are working on letting you buy crypto with PayPal. At the moment, we only let you trade Bitcoin against one fiat currency — the euro. But as the Zeply platform continues to grow, we plan to introduce more trading options. If these include more foreign currency trading options, then there is the chance that these may include conversion fees.
Unlike some other crypto exchanges, as any Zeply review would tell you, we are always up-front with our fees. We want you to be informed as to how does cryptocurrency work and why fees are such an important part of their operation. At the moment we only offer the chance to buy, sell and trade Bitcoin, but it works in a similar way to other cryptocurrencies like Litecoin and Bitcoin Cash. As such, it might mean that you could get caught out by the changing transaction fees. The same applies to all of the other cryptos that we will shortly be introducing on our exchange.
The fees for Ethereum are measured in gas that might sound a little different, but it is just a fraction of the Ether coin. This means that there will be no miners of the XRP coin which helps to keep those crypto transaction costs especially low. All of which means that you can be sure of competitive cryptocurrency fees at Zeply. We realise that nobody wants to have to pay cryptocurrency transaction fees, but they are an essential part of how cryptos function.
After all, exchanges like Zeply have operating costs that have to be met somehow, and transaction costs are a big part of this. The same applies to network fees. While network fees were initially introduced as one of the Bitcoin fees as part of an anti-spam mechanism, they quickly grew to be a way of keeping miners motivated to add transactions to the blockchain.
Such thinking also caused other cryptos like Ethereum and Ripple to introduce fees so as to verify each transaction. So while you might resist having to pay cryptocurrency fees, remember that they are essential for the safety and swiftness of your crypto trades. We understand that talking about cryptocurrency fees might not be massively exciting. All of which should help you to get more from your crypto trades.
All cryptocurrency exchanges will aim to make their fees as easy to understand as possible. As a result, Zeply will always ensure that you know whatever costs will be incurred for each crypto transaction. Be sure to read our guide to cryptocurrency fees for more about transaction fees, network costs and so on. Most people will be keen to buy crypto without having to incur any fees.
But such cryptocurrency fees are essential for the livelihood of crypto exchanges like Zeply so that we can continue to let you buy and sell cryptocurrencies. Read our guide to cryptocurrency transaction fees for more about this important issue. The cost of buying and selling cryptocurrencies will vary significantly across different crypto exchanges.
Read our guide to find out why this is. There is a huge amount of competition among crypto exchanges to have the lowest cryptocurrency transaction fees. This is because the competitiveness of the cryptocurrency fees is a big factor as to whether a customer will use the exchange or not. Read our guide to see how we became the lowest fee crypto exchange — this includes our Bitcoin fees too!
All crypto users will want to compare the cryptocurrency fees between different exchanges. This is because there can be a lot of variance between the costs for buying Bitcoin and other cryptos at even the best cryptocurrency exchanges.
As a result, Zeply will always make it perfectly clear that we have some of the lowest cryptocurrency transaction fees on the market. Check out our guide to see how they compare to the competition. Is Bitcoin Legal?