Bitcoin Network Fees: Everything You Need to Know

By Elizabeth Wright

September 09, 2019


Bitcoin Network Fees


With the rising wave of hype, Bitcoin network fees start fluctuating and raising concerns. This article is about to explain how Bitcoin network fees work and how to cut on the network fees.

What is a network fee?

Network fees or transaction fees represent an additional amount you pay to miners that include your transaction to a public blockchain.

The network fee is required to be paid for every Bitcoin transaction without exceptions in order to get mined and included to the blockchain. The minimum network fee is one Satoshi 0.00000001 BTC.

How is a Bitcoin network fee is calculated?

Network fees depend on the total size of your transaction as every block in Bitcoin blockchain is limited to 1 MB. The more KBs it weights, the more you will have to pay for it to be added into a new block amount of fees doesn’t depend on a service you use, they are calculated according to transaction size in bytes and network load.

You pay for making a record on the blockchain. As the average block size is ~1 Mb, there can be included only 1500-2000 transactions in it. Miners prioritize transactions with higher estimated fees and lower priority of transactions with lower fees. The more demand for Bitcoin – the more transactions are waiting to be processed and higher are transaction fees.

Factors that affect Network Fees:

The inputs and outputs of your transaction

Inputs represent the number of transactions that your Bitcoin address received and the whole amount of BTC you own. When you send BTC to any other address, some inputs of your previous transactions are sent to the recipient. Your inputs are collected together and then became an output.


  1. Alice received 3 transactions (inputs) – 0.3 BTC, 0.4 BTC and 0.5 BTC. Total balance = 1.2 BTC
  2. Alice sent Bob 1 BTC.
  3. After the transaction, Alice has 1 output = 1.2 BTC. Bob will receive 1 input = 1 BTC.
  4. Alice receive change = 0.2 BTC. Now Alice has 1 input = 0.2 BTC on her address instead of 3 inputs as it was on the start.

The bigger the number of those inputs, the larger the transaction size and hence the network fee.

Network overload

If there are too many transactions to be confirmed, the average fees become higher as the number of transactions that can be possibly added to 1 block is limited by 1 Mb.

Multisig feature

If you use a multisig wallet that requires multiple signatures prior to signing a transaction, the transaction size will be increased.

How can I cut on the network fees

Consolidate your inputs.

Don’t operate with small amounts. The less inputs you have in your transaction history, the lower fees you’ll pay in future. This calculator will help you to estimate the fee you will pay for the transaction and how quick it will be approved.

Pay or Wait

If Bitcoin Network is overloaded you will have to pay higher fees to get included into the next block as demand is increased. In extra cases you may use BTC.COM service to make a paid request for miners to pick up your transaction out of the queue.

The other way is just to wait till Mempool will be unloaded, so the demand and fees will jump down.

Use Atomic Wallet

Atomic Wallet uses a dynamic fee that is optimized for most user’s purposes. The wallet automatically calculates the network fee and provides a reasonable amount for fast transaction processing.

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