How Do Transaction Fees Relate to Network Security?
Transaction fees incentivize miners or validators to expend resources to validate transactions and secure the network. In Proof-of-Work systems, fees supplement the block reward, ensuring miners continue to dedicate computing power.
In Proof-of-Stake, fees reward validators for staking and processing transactions honestly. High fees can signal high demand and robust security commitment.
Glossar
Transaction Fees
Fee ⎊ Transaction fees, inherent in cryptocurrency, options, and derivatives markets, represent the cost of executing trades and utilizing network infrastructure.
Validators
Attestation ⎊ Validators, within cryptocurrency networks, represent nodes actively participating in a consensus mechanism, verifying and attesting to the validity of new blocks or transactions.
Miners
Validation ⎊ Miners, within the cryptocurrency ecosystem, represent network participants who compete to bundle pending transactions into blocks, subsequently adding these blocks to the blockchain through computationally intensive processes.