Coinbase has announced it will charge users a fee to send both Bitcoin and Ethereum due to what it calls “significant costs.”
In an update about its “spring cleaning” Wednesday, the exchange and wallet provider said it would no longer pay Bitcoin and Ethereum network miner fees from March 21.
The post states:
“We now have over six mln users worldwide, and this has become a significant cost. Fees will be assigned dynamically based on the current network conditions and will be paid by customers when they send an on-chain transaction.”
Coinbase is not the only business changing its practices in response to rising Bitcoin miner fees. Bitpay last week raised its minimum invoice amount from four cents to $1 to counter what CEO Stephen Pair described as an “exponential rise” in fees.
Coinbase’s move goes further, however, by installing the dynamic fees for Ethereum as well as Bitcoin transactions. Despite recent climbs in price and volumes, fees for sending Ethereum on-chain have not significantly increased.
The company added that its internal wallet-to-wallet transactions would continue to be free of charge, increasing the attractiveness of off-chain transactions for its users.
Such off-chain payments have previously attracted criticism from cryptocurrency experts. Commentator Andreas Antonopoulos wrote in a January blog post about how “on-coinbase transactions” present risks to the Bitcoin network.
“No segwit/No LN does not mean on-chain transactions. It means on-coinbase transactions, which is worse,” he said.