Every time you send your Bitcoin, you pay a transaction fee. Here’s where these fees go.
What is a transaction fee in the context of cryptocurrencies?
Transaction fees are the costs you have to be when you send coins from one wallet to another in a blockchain network.
Who receives these transaction fees?
This fee is paid either to the miners of the network, when it comes to PoW coins, or to validators of your transaction, in case your coins are PoS. It is better to refer to the explanation of these acronyms to get a better understanding of how rewards work based on the delivery of fees.
How do transaction fees work when sending Bitcoin?
Your Bitcoin transaction contains the fees you pay so that miners can process and validate them in the Bitcoin network. Currently, within the Bitcoin network, 1 MB is the transaction space in each block.
That being said, the Bitcoin transaction fee is set at:
- Next block fee: $0.21
- 3 blocks fee: $0.17
- 6 blocks fee: $0.04
What are the current transaction fees for the Bitcoin Network?
If you want to learn more about the average transaction fees for the Bitcoin network (i.e. how much you need to pay to send a certain amount of Bitcoin), check this website.
Bitcoinfees will indicate the fees you are expected to pay anywhere in the next 1,3 or 6 transaction blocks (1, 3 or 6 confirmations). On average, each block is solved within 10 minutes, which means that, depending on the fees you pay, the receiving party will receive their BTC within 10, 30 or 60 minutes.
Why is my transaction still pending, after a long time?
If your transaction is not processed yet, you might find that it is pending or unconfirmed in the network. The longer it takes for the transaction to complete, the busier the Bitcoin network is likely to be. Additionally, the amount of fees you choose to pay will also affect the speed of deliverability.
If these two are not the case, make sure you doublecheck the receiving wallet. Several platforms do not allow users to send their funds to Segwit wallets, and your wallet may be just that.
If you use a cryptocurrency exchange, fees are usually set.
When sending Bitcoin or other cryptocurrencies through exchange platforms, the fees are usually set to a certain amount. This is because the platform also makes a small commission from your activities. Therefore, it might be smart sending from a wallet to another, avoiding exchange-based wallets.
What if a transaction gets rejected by the network?
Outgoing Bitcoin transactions will eventually result in either a confirmation or a rejection by the network.
If your transaction is rejected, the funds will reappear in your wallet within 1 to 7 days. In other words, if you accidentally send Bitcoin to an invalid Bitcoin wallet, or if the fees you choose to pay are minimal, you will not lose your funds. You will also not pay Bitcoin transaction fee.
On the other hand, and this is more common than you might think, people also send funds accidentally to a valid address. If this happens, you will lose all the funds you sent and there will be no way of redeeming them.
If your transaction is confirmed, it means that the party you sent the funds to has received your BTC and is now in control of it. it also means that the fees you paid to confirm the transaction is now in control of the miner who validated your transaction. When a transaction is confirmed there is no need to take any further action.
Why are there transaction fees?
There are many reasons that make blockchain fees necessary in the Bitcoin network. Make sure you watch the video below to get a better understanding.
And that’s all! We hope you enjoyed our article that explains in detail what is a transaction fee and how it correlates to the Bitcoin network. If you still have unanswered questions, make sure you leave a comment and we will come back to you as soon as possible.