How New Bitcoin Is Created
Mining, block rewards, and the schedule that reduces new supply over time.
Bitcoin Basics
How Bitcoin Fees Work
Why fees vary, how miners prioritize transactions, and how to avoid overpaying.
Overview
Transaction fees compensate miners for including your transfer in a block. Fees rise when demand for block space is high and fall when the mempool is quiet. Wallets usually suggest a fee based on current conditions; you can often choose a priority level.
Consolidating many small inputs into fewer larger ones during low-fee periods can reduce future costs. For large transfers, paying a modest premium for faster confirmation is often worth the certainty.
Why fees exist
Block space is limited. Miners choose pending transactions largely by fee rate—satoshis per virtual byte. Higher-paying transactions tend to confirm sooner when the mempool is congested.
Fees pay miners for security work, not a middleman markup. As block subsidies decline, fees are expected to carry more of miner revenue.
How wallets estimate fees
Modern wallets sample recent blocks and mempool data to suggest slow, medium, or fast targets. Setting fees too low may leave a transaction stuck until conditions improve.
Transaction size matters: spending many small inputs creates a larger transaction and costs more at the same fee rate.
Practical fee strategies
For routine savings moves, a patient fee tier saves money without meaningful risk. For time-sensitive payments, a higher fee can be cheap insurance.
Layer-two networks exist for frequent small payments. For large on-chain transfers, a modest premium for faster inclusion is often preferable to uncertainty.
