Now, earn more with Coinmine Interest. Plus, new lower price of $699!

Bitcoin Transaction Fees: What You Need To Know

When Bitcoin is transferred from one address to another, Miners are awarded a small Transaction Fee. The same applies to Altcoins. While most traditional banks charge a set fee for a domestic and international wire (typically $10 and $20, respectively), the same can't be said for Bitcoin; the amount you pay is relative to several factors. 

In a nutshell, it all comes down to demand. When renting an apartment, you're paying for the amount of space in the building per square foot, whereas with Bitcoin (BTC) you're paying for the amount of space your transaction takes up on the Blockchain — the more you're prepared to pay, the faster your transaction will be processed.

If you're using a bog-standard digital wallet  Coinbase Wallet, for example — the Transaction Fee is set to the lowest possible amount by default. However, you do have the option to increase the figure to that of the asking price to be included in the next wave of transactions that are due to be handled, which can be viewed here.

Related: How To Mine Bitcoin Fast

Here's where the calculation takes a turn for the worst: The larger the transfer you're making, the more amount of data that's required to process it, so the more you're sending, the larger the cost. This figure is then combined with the aforementioned amount required to have the transaction processed to make the total Transaction Fee.

How to decrease Bitcoin Transaction Fees

The most effective way of decreasing Bitcoin Transaction Fees is using a Bitcoin Wallet that supports SegWit — a modification that configures a transaction's data in a way that's smaller in size, and thus takes up less space on the Blockchain. From there, you can also choose to group outgoing payments into one transaction to further cut costs.