Bitcoin Transaction Fee

1 min read

All Bitcoin transactions must pay a fee to be included in the blockchain. This forms a part of the incentive for miners to mine. The higher the fee a transaction pays, the more incentive miners will have to mine the transaction, meaning it will be confirmed faster. Because miners can only fit 4MB of data in each block, they rate transactions based on the fee-to-byte ratio, not the total fee paid. Thus, most wallets will display fees in terms of sats/vByte.

Bitcoin transaction fees fluctuate wildly, and many transactions pay high fees in order to guarantee rapid confirmation, while others pay low fees and simply wait longer for confirmation. In the future, most bitcoiners expect fees to rise as demand to transact on the network grows. There are a few methods for saving on fees, including UTXO consolidation, batching transactions, and using the latest transaction types, especially SegWit.