Topic: Coinkite: Faster Bitcoin Transactions – Miner’s Fee Done Right™ (Read 471 times)

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Faster Bitcoin Transactions – Miner’s Fee Done Right™
                                            
                                            
                                                





Coinkite already processes transactions and broadcasts faster than any other wallet at scale, where sub 10sec is our average.



Now we need to make sure the network accepts and mines that transaction faster too!



Set Custom Miner’s Fees and Choose from 2x, 3x, 5x 10BP or Your Own via API



Bitcoin miners provide a public service by verifying that transactions are valid and establishing a specific ordering for all spends. Without them the bitcoin network and currency hold no value.



In exchange, they are compensated with very small fees for almost all transactions that flow on the network. The first miner to confirm your new transaction gets to keep the fee amount you pay them. When the network is busy, it can be helpful to provide an extra fee to the miners to encourage them to prioritize your transaction into the next block, and speed its confirmation in the process.







At Coinkite, we calculate a minimum fee amount for each transaction. This calculation is very complex and depends on many factors, but is based primarily on the size of the transaction in bytes.



Once that minimum fee is calculated, we now offer a few choices, which we are calling the “fee mode”, to determine what to pay the miners:

Minium (min): Pay the minimum fee. This is the best choice for most transactions where speed is not a concern.

2x/3x/5x Minium: Pay twice / three-times / five-times the minimum fee. This should get your transaction into the blockchain faster. At peak times, we’ve seen 2x be the entry price.

5/10/50 basis points of the amount: Pay a few basis points (0.05%, 0.1% or 0.5%) of the amount of the transfer. If you’re transferring 100’s of thousands of USD-equivalent amounts, the cost of miner’s fees are probably not important to you. If you choose one of these percent choices, we will still cap the fee at 500x the minimum. So in most cases, because the transaction amount is thousands of times bigger than the fee, all those choices amount to the same “super fast” option (500x). However, for very small transactions, the percentage is still useful for limiting the relative cost of the fee.

ck: Coinkite pays the min fee (using specially-prepared UTXO). This option can only work with hot a wallet account due to the way multisig co-signing works. It might be restricted based on membership level or other policy choices.
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Interface: On the website, you’ll see pull down menus when you start a transaction so you can pick the fee mode for each thing you do on Coinkite.



Defaults: Of course there is user-preference too, so you can “set it and forget it”! So set it to 5x and never worry again about confirmation times.



Developers:



Most API endpoints (which can generate a transaction) will now offer an argument, which you can use to select the mode to use for each transaction. The user’s account-wide user-preference is applied otherwise.



Custom: Using the new Advanced Send feature, it is possible to specify an exact “custom” amount for the fee. However, we do not support zero-fee transactions. They are not truly supported by the Bitcoin P2P network anymore, and free transactions do not propagate well in our experience.





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