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How are BTC transaction fees calculated?

Certain crypto wallets on the Bitcoin network allow users to set transaction fees. It is possible to send BTC at no cost, but most likely miners will ignore these transactions and the transactions will not be verified.

Contrary to what some people think, Bitcoin fees are determined not by the amount sent, but by the size of the transaction (in bits). For example, let's say your transaction size is 400 bits and the average transaction fee is currently 80 satoshis per bit. In this case, you would have to pay around 32,000 satoshis (or 0.00032 BTC) for your transaction to have a good chance of being added to the next block.

When the network traffic is heavy and the demand to send BTC is high, the transaction fees that must be paid for fast confirmation also increase because other bitcoin users are trying to do the same. It is possible to encounter this situation during periods of high market volatility.

Therefore, high transaction fees can make it difficult to use BTC in day-to-day activities. It wouldn't make sense to pay a much higher transaction fee than this amount to buy a $3 cup of coffee.

Only a certain number of transactions can be included in a block with a 1 MB limit (block size). Miners add these blocks to the blockchain as quickly as possible, but there is a limit to this speed.

The scalability of cryptocurrency networks is of great importance in determining network fees. Blockchain developers are constantly working to solve this problem. The implementation of network updates such as SegWit and Lightning Network has resulted in improved scaling.


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