Bitcoin fee estimator

Bitcoin transaction fees are calculated based on the supply and demand dynamics of the Bitcoin network. When you send a Bitcoin transaction, you can include a fee to incentivize miners to include your transaction in the next block they mine.

Miners prioritize transactions with higher fees because they earn those fees as a reward for their work in securing the network and adding transactions to the blockchain. 2 components of calculations are transactions size and fee per vByte you want to pay. Transaction size depends on inputs and outputs.

Once you know both the inputs & outputs of your transaction as well as the fee per byte you are willing to pay you can calculate the estimated fee for your transaction. Our tool is here to help you. You don’t have to do anything manually. Just select the options and put the number for Inputs and Outputs and our free btc transaction fee calculator will do the rest.

Legacy Bitcoin transactions (transactions on the Bitcoin network that use the original transaction format, also known as Pay-to-Public-Key-Hash or P2PKH) are subject to the same fee estimation principles as other types of Bitcoin transactions. The fee for legacy transactions is estimated based on the following factors:

1. Transactions size : Transaction size can be calculated using following formula for the Legacy Bitcoin Transactions.

bytes = inputs * 148 + outputs * 34 + 10
So if the transaction has 1 input and 1 output it’s vSize will be 192 vBytes( in theory it can have slight difference, for example it can be 189 vBytes in some transactions, but that’s not important overall for fee estimations).

2. Fee Rate: The fee rate is the amount of Bitcoin you're willing to pay per byte of transaction data. This is usually denoted in satoshis per vByte (sats/vByte).

3. Confirmation Time: The speed at which you want your transaction to be confirmed also affects the fee you should include. If you're willing to wait longer, you can use a lower fee rate; if you need quicker confirmation, you should use a higher fee rate.

Segregated Witness (SegWit) is a protocol upgrade introduced to the Bitcoin network to address certain scalability and transaction malleability issues. It primarily affects the way transaction data is stored in a block, and it introduces several improvements over the traditional legacy Bitcoin transaction format (also known as Pay-to-Public-Key-Hash or P2PKH). Here are the key differences between SegWit and legacy Bitcoin transactions:

Transaction Structure:

• Legacy Transactions: In legacy transactions, all the transaction data, including signatures, is stored in the block. This makes transactions larger in terms of data size.
• SegWit Transactions: In SegWit transactions, the transaction signature (witness data) is separated from the transaction data. The signature data is stored outside the main transaction block, reducing the overall size of the transaction.

Transaction Size:

• Legacy Transactions: Due to the inclusion of signatures in the transaction, legacy transactions tend to be larger in terms of data size.
• SegWit Transactions: The separation of signature data allows for a reduction in the transaction size, resulting in lower fees for the same amount of data.

Fee Efficiency:

• Legacy Transactions: The larger size of legacy transactions often requires higher fees to compete for block space, especially during periods of network congestion.
• SegWit Transactions: The reduced transaction size of SegWit transactions leads to lower fees compared to legacy transactions, even for the same amount of Bitcoin being transacted.

The way fees are estimated for SegWit transactions is quite similar to how it's done for traditional legacy Bitcoin transactions. Several key factors come into play when estimating fees for SegWit transactions, including the size of the transaction, the fee rate chosen, the level of network congestion, and how quickly you want the transaction to be confirmed. The fee for a SegWit transaction is calculated based on these specific factors:

1. Transactions size : Transaction size can be calculated using the following formula for the SegWit Bitcoin Transactions.

bytes = inputs * 68 + outputs * 31 + 10
So if the transaction has 1 input and 1 output its vSize will be 109 vBytes.

2. Fee Rate: The fee rate is the amount of Bitcoin you're willing to pay per byte of transaction data. This is usually denoted in satoshis per vByte (sats/vByte).

3. Confirmation Time: The speed at which you want your transaction to be confirmed also affects the fee you should include. If you're willing to wait longer, you can use a lower fee rate; if you need quicker confirmation, you should use a higher fee rate.

Segregated Witness (SegWit) and Taproot are both protocol upgrades for the Bitcoin network that aim to improve various aspects of the blockchain's functionality. While SegWit primarily focuses on transaction malleability and scaling, Taproot focuses on enhancing privacy and enabling more advanced smart contract capabilities. Here are the key differences between SegWit and Taproot Bitcoin transactions:

Transaction Structure:

• SegWit Transactions: In SegWit transactions, the transaction data is separated from the signature (witness) data. This separation reduces the transaction size and mitigates transaction malleability issues.
• Taproot Transactions: Taproot extends the idea of separating transaction data from signature data, but it also introduces more complex scripting capabilities that enhance privacy and flexibility.

Privacy and Smart Contracts:

• SegWit Transactions: While SegWit improves certain aspects of transaction malleability and fee efficiency, its primary focus is not on privacy or advanced smart contracts.
• Taproot Transactions: Taproot introduces a new scripting model that enables more complex smart contracts while enhancing privacy. It does this by allowing multiple participants to collaborate on creating a single "taproot" address. This makes various types of advanced contracts appear indistinguishable from a regular transaction, thus improving privacy.

Signature Aggregation:

• SegWit Transactions: SegWit introduced a form of signature aggregation, which enables the combination of multiple signatures into a single data structure. This helps reduce the overall size of transactions.
• Taproot Transactions: Taproot takes signature aggregation a step further by enabling Schnorr signatures. Schnorr signatures can be aggregated across multiple inputs in a transaction, leading to even greater reduction in transaction size and improved privacy.

Determining fees for Taproot transactions is carried out in a manner quite similar to how fees are estimated for traditional legacy Bitcoin transactions. The key factors that come into play when estimating Taproot transaction fees include the size of the transaction, the chosen fee rate, the level of congestion on the network, and how quickly you wish the transaction to be confirmed. The fee for Taproot transactions is calculated based on these specific factors:

1. Transactions size : Transaction size can be calculated using the following formula for the Taproot Bitcoin Transactions.

bytes = inputs * 58 + outputs * 43 + 10
So if the transaction has 1 input and 1 output its vSize will be 109 vBytes.

2. Fee Rate: The fee rate is the amount of Bitcoin you're willing to pay per byte of transaction data. This is usually denoted in satoshis per vByte (sats/vByte).

3. Confirmation Time: The speed at which you want your transaction to be confirmed also affects the fee you should include. If you're willing to wait longer, you can use a lower fee rate; if you need quicker confirmation, you should use a higher fee rate.

Imagine Bitcoin like digital money. When you want to send someone Bitcoin, you use a special kind of message called a "transaction." This transaction needs to know where the Bitcoin you're sending is coming from. That's where "inputs" come in.

Think of inputs like the money you have in your wallet. When you want to buy something, you take out the money from your wallet to pay. In the same way, when you create a Bitcoin transaction, you pick the specific pieces of Bitcoin you want to use as payment. These pieces are called "inputs."

Now, let's say you're buying a toy for $10 worth of Bitcoin. You need to give the seller $10 worth of Bitcoin. So, you'll pick one or more of those "input" pieces of Bitcoin from your wallet, add them up to at least $10, and use them to pay for the toy. These inputs are like the money you're using to pay.

But what if you have more than $10 worth of Bitcoin in your inputs? Well, just like if you paid with a $20 bill for a $10 toy, you'd get change back. In Bitcoin, this change goes to a special place in your wallet. It's like getting smaller bills back after paying with a big one.

So, in simple terms, "inputs" in Bitcoin transactions are like the pieces of money you use to pay for things. You pick them from your digital wallet, just like you'd take money out of your physical wallet, and use them to buy stuff or send to other people. And if you use more money than you need, you get some back as change.

In the world of Bitcoin, when you want to send some of your digital money to someone else, you use a special note called a "transaction." This note has two important parts: "inputs" and "outputs."

Think of outputs like giving someone a gift card. When you give someone a gift card, they can use it to buy things. In Bitcoin, "outputs" are like the gift cards you give to other people.

Here's how it works: Imagine you want to send your friend $15 worth of Bitcoin. You write a transaction note that says, "Give my friend $15 worth of Bitcoin." This is the "output." You're telling the Bitcoin network that you're sending this gift card to your friend.

But, remember, you also need to say where the money for this gift card is coming from. That's where "inputs" come in. Inputs are like the money you put into your gift card before giving it to your friend. They show where your Bitcoin is coming from.

So, when you create a transaction, you pick some inputs (the money you're using) and create outputs (the gift cards you're giving). One output goes to your friend, and if there's any extra money from your inputs, it might come back to you as "change."

In simple words, "outputs" in Bitcoin transactions are like the gift cards you're sending to others. You say how much money to put on each gift card and where they should go. And if there's money left over, it's like getting change back after buying something with a big bill.