How to decide about fees? is it necessary ?

10_sjdovn_10

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Quote from: LoyceV on March 08, 2021, 07:32:23 AM

You can't send Bitcoin without paying a fee, unless you're using an off-chain transaction ("tipping") within a website.
Fees are calculated per (v)byte transaction size. Have a look at Johoe's Bitcoin Mempool Statistics. I usually check the right side of the top-graph to decide what fees to pay. In the past few hours, 7 sat/byte would have been enough.
See my topic about consolidating small inputs to pay less fees in the future.

Thank you , it helps a lot.

Theb

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Just search in Google "Bitcoin Transaction Calculator/Estimator" you will see websites such as this one where it shows you a time estimate on how fast is the transaction and determine how much do you need to pay per byte in order to achieve that time.

Quote from: 10_sjdovn_10 on March 08, 2021, 07:27:05 AM

some says fee is not required when paying with bitcoin !

The only wallets I know that don't "require" fees are custodial wallets that have off-chain transactions enabled and they don't ask you for a fee because the transaction doesn't happen in the blockchain hence it is called "off-chain", the only catch is the sender/receiver must have the same custodial wallet as you have (e.g. Coinbase to Coinbase)

Quote from: 10_sjdovn_10 on March 08, 2021, 07:27:05 AM

and some wallets require you to choose fees ! is it necessary ?

A fee is necessary when you are conducting your transaction in the blockchain. And yes some wallets allow you to choose a fee aside from setting it up on your own their are also wallets like Electrum where it gives you an option to have a dynamic fee where it chooses the fee that will be optimal time-wise for your transaction.

ranochigo

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Quote from: BrewMaster on March 10, 2021, 11:11:11 AM

it depends on how much. as long as it is not by an outragous amount, that would be OK. for example if the client is telling you to pay 100 sat/byte when you can pay 1 that is terrible but if it tells you 100 when you can pay 90, that's fine.

Perhaps, it can be better. It still fulfilled its primary purpose to help you get a confirmation within X blocks. I'd rather them overestimate the fees at times rather than underestimating them. Imagine taking the estimate for 2 blocks and it ends up taking a few hours for most of the time if it takes a more conservative estimate.

Quote from: BrewMaster on March 10, 2021, 11:11:11 AM

here is the problem (following above) electrum connects to one node and asks for fee from that one node and has no way of verifying if it is correct so using multiple sources may not be the worst idea.

If the server can't give you the correct mempool estimation, then it isn't reliable to be used as a server. You might not even see your own unconfirmed transaction if the server is that inaccurate. There is a fairly decent allowable margin of error for mempool estimations and not seeing a few transactions should be fine. Comparing the mempool of my nodes, there is only a slight discrepancy of roughly about ~1% with the transactions at a lower fee rate. Higher fees transactions are generally fairly well propagated so that's really not an issue.

But it is a valid point of course.

BrewMaster

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Quote from: ranochigo on March 10, 2021, 10:16:53 AM

Would it be bad to be overpaying for fees if you're almost always going to get a confirmation within the timeframe as stated (within X blocks)?

it depends on how much. as long as it is not by an outragous amount, that would be OK. for example if the client is telling you to pay 100 sat/byte when you can pay 1 that is terrible but if it tells you 100 when you can pay 90, that's fine.

Quote

Is there really a need to go to various sources for just the mempool stats?

here is the problem (following above) electrum connects to one node and asks for fee from that one node and has no way of verifying if it is correct so using multiple sources may not be the worst idea.

ranochigo

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Quote from: joniboini on March 10, 2021, 03:06:22 AM

Sometimes it gives you the wrong estimation too. As others have said, using multiple sources to determine the best fee for you is probably the best idea. I usually use mempool.space (link above) to find out the lowest fee on the latest block and check out Electrum mempool estimation, and then decide the fees. It takes some time to learn but helps a lot in the long run.

There is no such thing as a wrong estimation, unless you're telling me that your transaction doesn't get a confirmation within the ETA. Would it be bad to be overpaying for fees if you're almost always going to get a confirmation within the timeframe as stated (within X blocks)? Probably not. Overpaying for your fees is just a feature of Electrum's (and Bitcoin Core's) fees estimation system.

Is there really a need to go to various sources for just the mempool stats? I mean there is bound to be deviation from various different mempool but its somewhat consistent as long as you're aiming for the top few MB or so. Electrum's mempool estimation (within 0.5vMB, etc) is accurate enough and checking mempool sites would give you roughly the same results, probably easier than reading graphs or navigating around the other sites.

OmegaHodler

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you have got technical answers. I will give you some tips:

When fees are low consolidate your small inputs, it will reduce the number of inputs and you will pay lower fees. https://bitcointalksearch.org/topic/aug-2022-mempool-empty-use-this-opportunity-to-consolidate-your-small-inputs-2848987
Historically the fees are low on Sunday if you can send payment at any time try to check fee every Sunday.
use coinb.in/#fees to know how much fees for next block.
use bc1 addresses

mersal

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Quote from: joniboini on March 10, 2021, 03:06:22 AM

Quote from: mersal on March 09, 2021, 12:51:46 PM

that's why I recommended electrum Mempool if that user is not good at analyzing the mempool by himself.

Sometimes it gives you the wrong estimation too. As others have said, using multiple sources to determine the best fee for you is probably the best idea. I usually use mempool.space (link above) to find out the lowest fee on the latest block and check out Electrum mempool estimation, and then decide the fees. It takes some time to learn but helps a lot in the long run.

AFAIK, Electrum never game me overkilling fees but I do cross check the values with Mempool.space or other mempool recommendation websites.But I used to keep checking the mempool overtime when I wanted to make transaction because it often coming down to 20sats 30 sats in this week for very minimal time period.

mocacinno

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If transferring between my own wallets, i usually just make sure the rbf flag is set and pick a low fee... Usually something that lands me in the top-10 Mb or so... Then i wait... If i suddenly feel the urge the speed things up, i bump the fee... Sometimes i get lucky and my tx gets in a block, sometimes it gets dropped, sometimes i increase the fee.

If transferring to a thirth party, i usually start by examining them: how do they handle rbf? How fast do they require a confirmation? Do they reimburse you if your funding tx doesn't get confirmed in due time? How's their support?
Based on this information, i pick a fee... There is no one-size-fits-all formula tough... Even wallets have experimented with fee calculation, and so far every method has it's pro's and it's con's. I guess that's something new users have to learn to live with.

joniboini

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Quote from: mersal on March 09, 2021, 12:51:46 PM

that's why I recommended electrum Mempool if that user is not good at analyzing the mempool by himself.

Sometimes it gives you the wrong estimation too. As others have said, using multiple sources to determine the best fee for you is probably the best idea. I usually use mempool.space (link above) to find out the lowest fee on the latest block and check out Electrum mempool estimation, and then decide the fees. It takes some time to learn but helps a lot in the long run.

HCP

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Blockchain.com's fee selection algorithm is just plain bad... it either grossly overestimates the amount to pay... or it uses a stupidly low fee and your transaction will get stuck Undecided

Using a combination of:
https://jochen-hoenicke.de/queue/#BTC,24h
https://mempool.space/
https://bitcoiner.live/

Should give you a relatively good indication of what the current fee levels are... and what you'll need to use to achieve your target confirmation time. That is to say, are you wanting quick confirmation? or do you want to spend as little as possible on fees? Huh

mersal

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Quote from: BrewMaster on March 09, 2021, 11:36:04 AM

Quote from: mersal on March 09, 2021, 10:06:59 AM

If you are using coinbase or blockchain.com as your wallet then you no need to select the required amount of fee, which is determined by the wallet provider itself

people shouldn't be using these two services as their wallets ever. both are bad for different reasons. but when it comes to fees it is still determined by the network not by them. but they both charge more, coinbase as a payment for the service they offer and blockchain.com because they used to be (and still are) very terrible at writing a code that can analyze mempool and suggest a good fee so they overcharge.
and both overcharge because they don't want the transaction their users make be stuck so that maybe the user starts thinking about moving away!

Yes I know these should not be used as wallet, even I am having bitter experience with coinbase's vault service.

And coinbase doesn't give option to choose the fee by the user itself that is what I meant to say but their overestimation save people some time but end up paying more fee most of the time, that's why I recommended electrum Mempool if that user is not good at analyzing the mempool by himself.

ranochigo

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Quote from: mersal on March 09, 2021, 10:06:59 AM

If you are using coinbase or blockchain.com as your wallet then you no need to select the required amount of fee, which is determined by the wallet provider itself but if you are using other wallet like electrum then yu have to select the fee depends on how long you can wait for your transaction to be confirmed.

Blockchain.com does require their user to choose their fees but the way that it is labelled is potentially misleading, "Priority" and "Regular" for example. Without giving their users a clear timeframe for it to be confirmed, it usually causes much more confusion than the other wallets which gives a clear estimate. I'm not really sure about Coinbase though.

Quote from: BrewMaster on March 09, 2021, 11:36:04 AM

and both overcharge because they don't want the transaction their users make be stuck so that maybe the user starts thinking about moving away!

Its quite common for services to overcharge for their transactions; lesser loads for their support if the transaction gets stuck. Fees estimation algorithm tends to usually be more conservative with their estimates, depending on what client you're using. Referencing mempool directly either using an online UI or the wallet might be confusing for the user. At least ETAs would give a much clearer estimates on the timeframe.

BrewMaster

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Quote from: mersal on March 09, 2021, 10:06:59 AM

If you are using coinbase or blockchain.com as your wallet then you no need to select the required amount of fee, which is determined by the wallet provider itself

people shouldn't be using these two services as their wallets ever. both are bad for different reasons. but when it comes to fees it is still determined by the network not by them. but they both charge more, coinbase as a payment for the service they offer and blockchain.com because they used to be (and still are) very terrible at writing a code that can analyze mempool and suggest a good fee so they overcharge.
and both overcharge because they don't want the transaction their users make be stuck so that maybe the user starts thinking about moving away!

mersal

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Quote from: 10_sjdovn_10 on March 08, 2021, 07:27:05 AM

Hello, can anybody help with Fees and how to determine how much it should be ? is it associated with amount of bitcoin?

some says fee is not required when paying with bitcoin ! and some wallets require you to choose fees ! is it necessary ?

How are fees technically calculated ?

If you are using coinbase or blockchain.com as your wallet then you no need to select the required amount of fee, which is determined by the wallet provider itself but if you are using other wallet like electrum then yu have to select the fee depends on how long you can wait for your transaction to be confirmed.

Even if you are using any other wallets having electrum may give clear idea of how much fee you need to pay with the mempool option s create a dummy wallet and tap the ETA to Mempool on the fee slider and input the fee shown there on your wallet.

dkbit98

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It is not necessary to manually change fees but nobody likes to pay extra and throw away money like that.
You can follow Bitcoin mempool fees in your browser using my open source browser extension project [BETA] BTC Mempool Fees Extension/add-on for Firefox/Chrome browser that is using data from 3 different websites with mempool.space as default.

BlueWallet is now offering nice choice when you send Bitcoin using real time mempool based estimations, but I would always double check mempool state myself.

sheenshane

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Quote from: 10_sjdovn_10 on March 08, 2021, 07:27:05 AM

Hello, can anybody help with Fees and how to determine how much it should be ? is it associated with amount of bitcoin?

Hi there!
It will depend on which wallet you have used because there's a type of wallet that you can modify fees and while others it has fixed fees based on their wallet. Electrum wallet has this feature of modifying fees and it has associated with different national currency if what you want, your local currency or dollar currency.

By determining fees that required to the mempool, it has Low, Medium, and High priority fees and for modifying fees that depend on the transaction speed, use this Bitcoin calculator. It was given there the transaction fee and include the transaction speed that you prefer or for the graphic statistic of Bitcoin transactions, for pending transactions, unconfirmed transactions and mempool size use Johoe's Bitcoin Mempool Statistics.

Quote

some says fee is not required when paying with bitcoin ! and some wallets require you to choose fees ! is it necessary ?

No, there's no way to avoid fees, it's mandatory to have a tip from Bitcoin miners that our all transactions be confirmed. And I stated above with the wallet that can modify and has a fix fees.

hulla

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Quote from: 10_sjdovn_10 on March 08, 2021, 07:27:05 AM

Hello, can anybody help with Fees and how to determine how much it should be ?

It necessary to decide fee to avoid stuck of transaction but you'll need to use a Bitcoin transaction estimator which provides you the best fee to send your transaction footing the size of mempool.

Quote from: 10_sjdovn_10 on March 08, 2021, 07:27:05 AM

is it associated with amount of bitcoin?

A transaction fee is associated with the total input/output count, transaction size, and the wallet use (if it Segwit or Legacy supported wallet but Segwit provides low fee opportunity).

Quote from: 10_sjdovn_10 on March 08, 2021, 07:27:05 AM

some says fee is not required when paying with bitcoin ! and some wallets require you to choose fees ! is it necessary ?

Fee is required when making a transaction in Bitcoin but you need to pay if you're sending the Bitcoin within a certain exchange or platform that offer free transaction between their user.

Quote from: 10_sjdovn_10 on March 08, 2021, 07:27:05 AM

How are fees technically calculated ?

For legacy supported wallet
bytes = inputs * 146 + outputs * 33 + 10
For Segwit supported wallet
vBytes = inputs * 68.5 + outputs * 31 + 10
source

mocacinno

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There are 2 important things you should know before continuing:

A block can only contain a maximum of 1 Mb of transactions (not including the witness data).
The fee is the difference between the sum of the values of all inputs and the sum of the values of all outputs. The miner can add the sum of all fees of all transactions he put in the block he's trying to solve to the coinbase transaction (the transaction paying him)

So, a miner is a business. He wants to maximise his income. Thus, it makes sense to add the transaction with the highest fee per byte of data (since the blocksize is limited to 1 Mb, not including the witness data).

A conclusion should be that the fee has very little to do with the value that's being transacted. An input with a value of 1000 BTC has the same size as an input with a value of 0.000001 BTC. It's the AMOUNT of input(s), the AMOUNT of output(s), and the type of wallets that are being used that determine the size...

A transaction using 10 unspent outputs with a FIAT value of $1, funding 2 legacy addresses using a legacy wallet will have a fee that's much higher than a transaction using 1 unspent output with a FIAT value of $1.000.000 funding one native segwit address using a segwit wallet.

Since segwit, we're using vbytes instead of bytes... But the principle stays the same.

LoyceV

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You can't send Bitcoin without paying a fee, unless you're using an off-chain transaction ("tipping") within a website.
Fees are calculated per (v)byte transaction size. Have a look at Johoe's Bitcoin Mempool Statistics. I usually check the right side of the top-graph to decide what fees to pay. In the past few hours, 7 sat/byte would have been enough.
See my topic about consolidating small inputs to pay less fees in the future.

10_sjdovn_10

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Hello, can anybody help with Fees and how to determine how much it should be ? is it associated with amount of bitcoin?

some says fee is not required when paying with bitcoin ! and some wallets require you to choose fees ! is it necessary ?

How are fees technically calculated ?

Topic: How to decide about fees? is it necessary ? (Read 332 times)