Topic: Can someone help explain Bitcoin transaction fees? (Read 495 times)

BCH is just an altcoin which was created when trying to make a clone of Bitcoin.Bitcoin has huge user base all over the world.It is highly used for even payments in Japan where it has been legalized and south korea which is much user friendly to bitcoin.Also,more people have started to buy bitcoin as a high return giving asset.So,the transaction volume is very high.More over,some miners deliberately prefer to confirm transactions with high transaction fee and they just try to avoid transactions with low fee.This issue would get solved when once segwit gets completely locked in and after that,fee would get reduced much considerably.BCH does not have high er number of transactions and it is just pumped by some big whales for some quick profits otherwise,it would have lost its value totally by this time.

there are many factors which affect Bitcoin transaction fees. Take a look at these articles to understand it better:

http://bitcoinfees.com/
https://99bitcoins.com/bitcoin-fees-explained/

Riches and hot headeds 

the transaction fee is just likened to the amount needed to process and transport your money down to you for your use, like if you buy goods online- charges for the shipping and delivery. and it has to be different because the amount of your goods determines which vehicle will be used to convey it.

I am new in this community as well and as far as my whole knowledge is concern. The bitcoin transaction fees is for the payment or the toll for the miners. I think that is how it is.

The miners are the one to blame!!! Lol.
But really, the difference is because of the demand of the coin. In the case of BCH, it has kow fees because it has fewer people into it which means fewer transactions. And in bitcoin, there are lots, meaning lots of transactions. And the miners on both sides decide the prices they want to include a transaction in the block or the next. Just like a bus. But the who pays higher gets to ride first.

UPDATE: I sent a few transactions to my newly created Segwit wallet on my Ledger from my Legacy wallet. The original total fee for one of the transaction was $11.23, on high by default. When I manually typed it in as a low transaction the total fees were only $1.16, a $10.07 difference! The transaction took less then two minutes. After I received the tx I wanted to compare the cost of the tx on Segwit vs Legacy. I setup the same transaction on Segwit, the total fee on high, by default That came out to be $6.37. Then I did the manually custom on Segwit, total fee manually lowered. That came out to be $0.55, a $5.82 difference! Not sure how long to send the tx, didn't send it just set it up and canceled.. Either way point of post is to help new people, or anybody that did not know. You can save money in transaction fees ($10.07 myself on one tx)if you're sending from Legacy to Segwit, at least in Ledger Wallet by tweaking the a few things. It's also a good gauge for the benefit of Segwit over Legacy. Legacy was $1.16 vs Segwit $0.55, that a $0.61 difference. Reduced by more the HALF! Segwit is the way to go.

using $ for fees in a bitcoin transaction is meaningless.
using an absolute number for fees in a bitcoin transaction is also meaningless.
the only meaningful unit is amount in satoshi,... per Byte or kByte

and the reason for the lower fees in BCH is the same reason why fees are low in LTC, Doge, RDD,... and all those other altcoins. nobody uses them. in fact Dogecoin average fee is 1Doge=$0.0024 no matter what the size is

Here is some other feedback I'm getting, can anyone confirm or deny this?

"Some wallets allow you to set the fee per category like economy , normal , fast at different fee rates

Others allow the above but also allow you to manually type in the exact fee to get much cheaper rates . Thus checking here https://bitcoinfees.21.co tells you on average how many blocks to get your first confirmation .

You send a tx , it shows instantly , but it is unconfirmed until included in a block.

Thus by manually setting the fee you can see that its fine to wait 2 blocks at 10-20 sats per byte , thus avg tx size 226 bytes x 10 sats = 2260 satoshis tx fee or 11 cents instead of a couple dollars other wallets might charge you due not being as precise with the fee market


If you are dealing with small amounts it is critical that you control the amount of the fee manually so you aren't overcharged. Therefore you need to use airbitz or green address that allow this. Trezor/ledger/core allow this too. study this page - https://bitcoinfees.21.co

If you are paying high fees in bitcoin right now it means you are using a wallet that guesses the fee wrong and just need to switch wallets.

Also keep in mind that txs fees are priced in bitcoins and not USD , therefore when bitcoin is very valuable the fees can go up as well. The altcoin Bcash is worth a fraction of what bitcoin is and blocks are almost completely empty because few people use that alt and almost no merchants accept them so you really cannot compare it directly with bitcoin"

"Example- right now 130 sat will likely get in immediately, thus that is

130x226bytes= 29380 sats or 1.44 usd , but will segwit(sending from a segwit address) it will likely be 70c to 1 usd "

So when you say it will take longer to get confirmed but it will eventually get confirmed? Honestly I'll probably just pay the regular fee to send, if I even do. (Legacy > Segwit)

Just for my curiosity...I don't understand how you pick the fee manually, just come up with a number?  What if it was so low it didn't get accepted, would it sit in pending and eventually cancel?

Make sure to read this over and over again. Nowhere in any calculation will you ever see how many dollars it cost to send bitcoins so you need to get the terminology down pat to understand where the fees are coming from.

All in all, bitcoins are more popular than that 97% mined by bitmain altcoin known as BCH. That's why the fees are higher. There are more transactions, so the blocks are more full so you need to pay more than the other guy for yours to go through first. BCH has cheap fees because it's a shitcoin that no one uses now, nor will they ever.

read here then post your doubts:

https://en.bitcoin.it/wiki/Transaction_fees

The article applies to BCC too.

I don't know.  I don't pay much attention to what's happening with BCH.


More people want to use Bitcoin, so they are willing to pay more for the limited space available.


Not true.

more transactions = higher fees.  Less transactions = lower fees.

The number of miners doesn't directly effect the transaction cost.

The relationship is mostly the other way around...

If there are more fees (and therefore more money to earn from fees) then it will attract more miners.

Yeah , with manual low fee pay for the transaction we need to wait longer time for the confirmation because sometimes conditions not remain simple for the amount of the bitcoin for which we arr going to make transaction .
Here you need to know that in the transaction fee a factor of input and output works and that things specify the fee that is needed to pay and for getting confirmation easily .
If you are sending 1btc which you got from 10 people then surely the fee wilp be High , and if the amount of bitcoin that you want send you got from the single or less no. Of transaction then it will require less fee than what we needed in first case .
So with the trick you can specify that how much fee can me high for a transaction .
Here my suggestion for the OP is to use the recommended fee because in manual fee we can't make sure that transaction will get confirm easily .

you can set your fee manually and from experience there are a few wallets that lets you easily do this. Bitcoin core let's you do this(obviously). Blockchain.info has a custom send feature in which you can send with a manually set fee. Electrum let's you choose the level of fees you would want to pay. I'm not sure whether you can choose exact values but it should be close enough. Copay is somewhat like electrum but with even less flexibility.

Think of miner fees as a fee you pay them for a confirmation on your transaction, so that your transaction is proven to be valid and not a double spend. I would not recommend going below the recommended fee level unless you are confident you can accelerate your tx or you don't care about your transaction being stuck.

Thanks for the replies! From more research it looks like by setting the fee manually, which some wallets allow the fee to be set manually could be a fraction of the price? Although it might now be accepted right away, would have to wait for a block. Any truth to this and how much cheaper?

First, fees fluctuate and nobody sets the fees except the person that makes the transaction.

Here is how fees work: there is a limited amount of space in a block, possibly not enough to hold all the pending transactions. A miner creating a block decides which transactions to include and which to exclude. Generally, the decision is based on the amount of fee paid by the transaction relative to its size because the miner wants to maximize the amount of fees. In the end, transactions paying more fees are likely to be included in the next block, and transactions paying less fees are not.

In the Bitcoin case, there are a lot of transactions and not much space. If you want your transaction to be in one of the next few blocks you will have to pay more than others are paying.

In the Bitcoin Cash case, there are many fewer transactions and a lot more space, so paying only a tiny amount is enough to be one of the transactions that gets included.

The difference might be understand by this paralel:

Bitcoin Cash is like village with 1.000 people in, where one bus with 80 capacity is used.
Bitcoin is like small town with 10.000 people in, where one minibus with 10 capacity is used.

Tickets, or fees are based on actual demand - who pays more can get in the bus, others just have to wait when the bus returns again. Now you can imagine why the diference in fees.

Forgot to post the link where I found this information https://bitinfocharts.com/comparison/bitcoin-transactionfees.html

From what I've read the avg tx fee for BTC is $8+ per transaction (is this correct?) and the avg transaction fee for Bitcoin Cash BCH is 0.3 USD .30 cents (is thao correct?) if so why and how could there be such a difference? I know more miners =lower fees but that much lower? Hopefully someone can shed some light on my confusion. Thanks !