What You Need To Know About The Bitcoin Network Fee

What You Need To Know About The Bitcoin Network Fee
What You Need To Know About The Bitcoin Network Fee

In recent days, the Bitcoin network has experienced a rise in its market capitalization and also has suffer high volume of traffic generated by users in its network due to the number of transactions, resulting in an additional cost of up to $30 each transaction when needed urgently, which makes it similar to the transaction costs that are usually associated with the bank industry; fees that were precisely part of the Bitcoin was trying to avoid. Additionally, those overpriced fees make it impossible for users who wish to send small transactions because they are now too expensive. As of right now, it can be easily observed how this situation has escalated and is now having an impact on Blockchain, especially with Bitcoins. On bitcoinfees.info you can find the average daily cost of the Bitcoin network fee:

What You Need To Know About The Bitcoin Network Fee

(Bitcoin network fee on December 20, 2017, source: bitcoinfees.info)

But: What is the commission of the Bitcoin network?

The Bitcoin network commission, also known as the miner commission, is a transaction fee in Bitcoin that is charged to users when they do transactions with Bitcoin. This commission is collected as a reward to the miners for the maintenance of the Bitcoin network.

You must pay the commission to the network to ensure that your Bitcoin transfers arrive on time. This commission is one of the main tools used to accelerate Bitcoin transactions, which are sometimes slow due to high traffic of users in the Bitcoin network. Generally, the higher the commission, the quicker your transactions will be verified.

For the fastest Bitcoin transfers and exchanges, each transaction requires a blockchain commission. Normally, the commission is low, but sometimes higher fees may be required to complete your transfer or exchange. This article will explain the reason why and how you can avoid high blockchain fees.

But: Why is the Bitcoin network commission so high right now?

Network fees depend on several factors, including network traffic, time for transaction confirmation (affected by liquidity providers), and blockchain size (measured in kilobytes; affected when converting bitcoin from multiple entries as profits of a faucet or other microtransactions).

In other words, you may have to pay blockchain fees higher than normal if:

  1. The Bitcoin network is busy or heavily loaded at the moment. Normally, the commission increases during fluctuations in the price of Bitcoin and important global events.
  2. Your Bitcoin wallet has a history of micro revenues (such as referral bonuses). If your wallet has large amounts of small income, the size of your transaction will be higher since it will consist of many entries.
  3. The larger the size of the transaction, the higher the blockchain commission.

There may be other reasons that cause high blockchain fees, but we have listed the most common ones.

What You Need To Know About The Bitcoin Network Fee

(Bitcoin fee chart 2017, source: bitcoinfees.info)

So: Is it possible to lower the commission of the Bitcoin network?

You can make transactions without commission if you do not mind waiting a little bit longer for confirmation. Many wallets allow you to choose the commission, even though they establish one by default. For example, in Bitcoin Core, if you go to preferences you can choose the commission and put 0.00000000 as commission. Multibit, Electrum and Armory also allow you to choose the commission.

To avoid “spam” and the “dust” of the network, most miners discriminate transactions without commission, especially if they are very small amounts. But if you send one Bitcoin with commission 0, you won’t get your transaction confirmed fast enough or never been confirmed.