As a new user exploring Bitcoin, I often hear about transaction fees and how they can vary significantly. I want to understand how these fees work and what factors influence their amount.
Are there specific times or methods to minimize these fees?
Additionally, how do transaction fees impact the speed of confirming a transaction on the Bitcoin network?
Any insights into best practices for managing fees as a beginner would be greatly appreciated!
What should I know about Bitcoin transaction fees as a beginner?
byu/Dankk911 inBitcoinBeginners
Posted by Dankk911
3 Comments
Bitcoin fees depend on network congestion and transaction size (in bytes).
Higher fees get confirmed faster, lower fees may wait.
To save fees, send during low activity times, use SegWit addresses, and don’t rush unless needed.
Understand that fees are basically an auction system. Since there is limited block space only so many transactions can fit into every (10 minute) block. Your fee is a bid to be included into the next block. If there is no congestion you can bid extremely low and your transaction will be chosen and included (confirmed). If there is a lot of congestion your bid won’t be chosen and confirmed until block space demand reduces to the point that your bid is more in line with what others are paying.
The lower you set your fees, the slower your transaction Ill go through. Think of it like paying a busdriver for a ride: the busdriver will (or should at least lol) take the highest payers first, and then the ones who pay less.
You can check the mempool to see current fees ofcourse.