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Topic: Who receives the Bitcoin transaction fee and how does it technically work? - page 2. (Read 415 times)

legendary
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Welt Am Draht
Transaction fees are usually collected by the miner who produces the block. Any uncollected fees are permanently destroyed. From the Bitcoin Wiki:

I was under the impression that in many cases it's the pool operator who keeps the transaction fees. Only a certain number of pools share the transaction fees with the people mining with them. Funnily enough the ones that don't coincided with that fee explosion back in the day. Even more mysteriously they were trying to push BCH and most had links to Bitmain.
legendary
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I suggest you read 'Mastering Bitcoin' by Andreas if you're serious about learning Bitcoin. Or spend 6 hours on the wiki page.
legendary
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Merit: 1960
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It is also worth mentioning that the miners fees in most cases do not end up going to a single miner. A lot of smaller miners are mining within a mining Pool and the rewards are distributed according to the hashing power that was contributed by the miners in that Pool.  Wink  - https://en.wikipedia.org/wiki/Mining_pool    Roll Eyes

Also, when the Block reward are diminished over time with all the Halvings, the Miners fees will have to increase in value or transactions will have to increase dramatically to make it profitable for miners to continue mining in the future.

Just to give you an idea of what kind of money we are talking about.  --> https://www.blockchain.com/charts/transaction-fees-usd

Luckily for us it looks like the transactions are gradually increasing over time. See this chart for more details :
https://www.blockchain.com/charts/n-transactions-total?timespan=all
legendary
Activity: 1652
Merit: 1483
"COINBASE (Newly generated coins)"

What have newly generated coins to do with sending BTC from one address to another?

forget about "addresses" for a moment. that's just a human abstraction.

there are inputs and outputs. the coinbase (which claims the block reward, which includes newly generated coins) is an input. the coinbase transaction spends that input to an output (or "address") under the miner's control.

blockchain.com's explorer is oversimplifying things. only the 12.5 BTC subsidy = "newly generated coins". the rest of the block reward = fees collected from the other transactions in the block.
legendary
Activity: 1652
Merit: 1483
Can I see on the blockchain to what BTC address the transaction fee went?

yes, just check the coinbase transaction of any given block.

for example: https://www.blockchain.com/btc/tx/b1e12ab3f33e71e7fff9859334e5b146290a1daa4bc7a462cceb90a17f9fa5c1

the block reward (12.5 BTC subsidy + 0.25934459 BTC fees) was sent to 1C81BGyi8SJ919UxnHm2iwNmaN2RHfU4us

What has a miner technically to do to claim the transaction fee?

1. create a coinbase transaction that claims the block reward (subsidy, fees, both) and sends it to an address under his control
2. mine a valid block on the longest chain which includes that coinbase transaction

https://bitcoin.org/en/glossary/coinbase
https://bitcoin.org/en/glossary/coinbase-transaction
hero member
Activity: 1344
Merit: 507
A node verifies transactions on the blockchain.
A node verifies the transactions but do not get the relay fee?


A miner solves (creates) blocks, which are then verified by nodes.
A miner creates blocks to process BTC transactions to BTC addresses?
legendary
Activity: 2912
Merit: 2066
Cashback 15%
Who receives the Bitcoin transaction fee and how does it technically work?

In terms of how it looks in the protocol:

The transaction fee is the difference between the inputs of a transaction (ie. the amount that leaves the sending addresses) and the outputs of a transaction (ie. the amount that arrives at the receiving addresses).

They can be claimed by a miner by adding the transaction fees amount to the block subsidy amount and sending the whole sum as output to their receiving address.



What is the difference between node and miner?

A node verifies transactions on the blockchain.

A miner solves (creates) blocks, which are then verified by nodes.

You should ask any more questions like this here: Beginners & Help.

It's worth noting that there's no distinction between miners and nodes on the protocol level (at least if I recall correctly). While the people running mining hardware do not necessarily run their own node, the mining pool that they are directing their hashpower at will. It is this node (or nodes) that will then broadcast the blocks as built by the miners.

So from a protocol point of view they are all just nodes -- it's just that some find new blocks (miners) and some don't.
legendary
Activity: 2562
Merit: 2045
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Transaction fees are usually collected by the miner who produces the block. Any uncollected fees are permanently destroyed. https://en.bitcoin.it/wiki/Miner_fees
The Bitcoin transaction fee is a miner fee?

What is the difference between node and miner?





A node verifies transactions on the blockchain.

A miner solves (creates) blocks, which are then verified by nodes.

You should ask any more questions like this here: Beginners & Help.
legendary
Activity: 1666
Merit: 1196
STOP SNITCHIN'
Who receives the Bitcoin transfer fee and how does it technically worK?

Transaction fees are usually collected by the miner who produces the block. Any uncollected fees are permanently destroyed. From the Bitcoin Wiki:

Quote
When a miner creates a block proposal, the miner is entitled to specify where all the fees paid by the transactions in that block proposal should be sent. If the proposal results in a valid block that becomes a part of the best block chain, the fee income will be sent to the specified recipient. If a valid block does not collect all available fees, the amount not collected are permanently destroyed; this has happened on more than 1,000 occasions from 2011 to 2017,[1][2] with decreasing frequency over time.

This thread might be better off in Beginners & Help.
hero member
Activity: 1344
Merit: 507
When I send BTC from one address to another address I have to pay a fee.

Who receives this fee and how does it technically work?


Transaction fee: https://bitcoin.org/en/glossary/transaction-fee

Definition

The amount remaining when the value of all outputs in a transaction are subtracted from all inputs in a transaction; the fee is paid to the miner who includes that transaction in a block.

Minimum relay fee: https://bitcoin.org/en/glossary/minimum-relay-fee

Definition

The minimum transaction fee a transaction must pay (if it isn’t a high-priority transaction) for a full node to relay that transaction to other nodes. There is no one minimum relay fee—each node chooses its own policy.
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