Bitcoin Transaction Fees follow-up / Bitcoin 交易費用的續報

English version

After a review of my story related to Bitcoin transaction fees, I think I should write a follow up story to say more on the topic.

Sending Bitcoin from SegWit Wallet

Last story, I talked about sending Bitcoin from non-SegWit wallet that starts with 1 to a SegWit wallet that starts with 3. I did not come across in detail how to calculate the virtual bytes.

Indeed, the concept of virtual bytes is hard to explain in a few words. Therefore, I think the most important point you might need to know is how many virtual bytes it would take. There are not so many wallets that support SegWit yet, so I only use my Ledger Wallet app as an illustration. In Ledger Bitcoin Wallet > SegWit > Send > Custom fees, I enter 100 satoshis per byte and here is what I get:

You can see the Ledger Wallet Bitcoin app automatically calculated the fee as 0.000164. As 100 satoshis is in fact 0.000001, we can get the size by this formula:

0.000164 / 0.000001 = 164 bytes

It is way smaller than the size we used in last story – 226 bytes. The saving is (226-164)/226 = 27.4%. Although the size depends on your actual transactions, it should be more or less like 164 bytes for SegWit transactions.

Non-SegWit to Segwit, any savings?

Let us take a look again on the size of the transactions from this picture taken form the last story.

It was 223 bytes. In this transaction, I only instruct my wallet to send some of the Bitcoin to SegWit wallet. It needs to send the rest of the Bitcoin in my wallet to anther non-SegWit address in my original wallet.

This is a new transaction I briefly mentioned in last story. I tried to empty my wallet and you can see the transaction was sent from the wallet that starts with 1 to the SegWit wallet that starts with 3, no additional output to non-SegWit address. The size was 189 byes. At first, I thought it could be the magic of SegWit. I later found out it is not. I look at a transaction of mine that empty wallet before SegWit activation and it was 192 bytes. So I can see these transactions will not be benefit by SegWit.

Result of setting a very low transaction fee

The same picture also let us know the result of setting a fee that is too low. It took 3968 minutes to get processed. I am lucky it takes only 3 days. Don’t set the fee too low!

How to use the 2 websites for fee estimation

It is like I previously said, just look for the 1st green bar in the 1st website, that shows the lowest fee that has 0 delay.

In the 2nd website, simply look at the right-hand side - the Size Count column. It adds up from the top and the best transaction fee is the lowest fee within the first 1MB, that is the 1st 1MB block Bitcoin network should be processing. This gives us the suggested best fee at the top.

In fact, there is one more point I found interesting. For most of the time, there are a lot of transactions placed below 40 satoshis. Those who placed these transactions probably think their transactions should be processed some time when the mempool is less busy. They are also probably using RBF that they can increase the fee if they need to get the transactions be made faster.

Donation Banner

Starting from this story, I will be placing a donation banner at the end of the story. I believe there must be non-Steemit readers found my story from search engines. They don’t have Steemit Account and therefore have no way to support me. I just hope the banner can give them a way to send donations to me if they like my work. If you recognize a way I could improve the banner, please kindly let me know.