How to Save Money on Bitcoin Transaction Fees

hey guys its Chronos and today we're gonna learn how to pick the best fee for your Bitcoin transaction the Bitcoin network has become more and more congested recently so it's no longer always the best idea to just accept whatever fee is suggested by your wallet software sometimes that plan will have you spending way more than you need to for your transaction instead I like to take a look at a snapshot of a Bitcoin nodes in memory pool to get an idea of what fee would make sense if that was a little too much jargon for you don't worry I'll walk you through it let's get started there are a couple of great websites that give you some insight into the fee situation on the Bitcoin network but one that I like to use is this one here it's Bitcoin fees earn calm and it'll come up as one of the top search results if you search the internet for Bitcoin fees so what are we looking at here the first thing you're going to notice is the scale on the left this is how many Satoshi's per byte people are willing to pay to get their transactions processed Satoshi is a very very small portion of Bitcoin and a byte is a very very small measurement of the size of a Bitcoin transaction and I don't mean size as in the amount of Bitcoin that's being sent it's actually size as in the number of addresses that are being sent from and to in the transaction so that's an interesting thing to keep in mind as well sending more Bitcoin doesn't require more fees instead sending Bitcoin from more addresses requires more fees so at the top of the chart here we see the lowest fees possible one to ten Satoshi's per byte and the orange bar represents how many transactions are currently waiting to be processed that are paying this amount of fees a whopping 41,000 transactions are waiting and those probably won't be processed because this is a auction based system or the higher bidders the people who are willing to pay more in fees are going to be processed first so all of these other transactions are processed first the right columns here the delay in blocks and the delay in minutes gives you an idea of how long they'll need to wait to get the transaction process and you could see INF or infinity on some of these ranges because yeah let's be honest that might never get processed so the orange part represents transactions that are waiting across the entire network but the blue part gives us a nice snapshot of what's recently been happening on the network this is the number of transactions that have joined the memory pool in the last 24 hours so it kind of tells you what people have been paying recently on the Bitcoin network so let's scroll down to the section with the higher fees you can see all of these are orange bars when we get way down here to the high price area you'll actually see the bars turn yellow which represents transactions that we processed more quickly and then the green section is transactions that are at the front of the queue that will probably be processed in the next block so if you're using your Bitcoin wallet software to estimate a fee it's very possible that if you choose fast priority transaction it's going to give you something in the green area and it will probably get processed in the next block but if you choose normal or low priority it's still going to choose something in this range something in the orange range to be processed in the next couple blocks or something in the red range but as you can see if you look at this chart you could save a lot of money on fees by looking at the whole chart instead of just the very tip if I'm running a transaction that I want to be processed very quickly I'm going to choose something in this green range probably about 381 Satoshi's per byte but if it's not an urgent transaction I'm willing to wait a couple hours I'm not going to choose something in the orange area and I'm not going to choose something in this red area because when a Bitcoin block is mined it could knock all of these transactions back and process them all the way back to this area 111 to 120 Satoshi's per byte why is this well there's an interesting aspect at the Bitcoin network which is that Bitcoin blocks are not mined on a regular schedule on average they're mined every 10 minutes but it's completely random you could have an hour go by with just one block mined or you could have a couple of blocks mined in a single minute because of that if you pay a fee that's up in this area like 100 satoshis per byte and you wait it's quite likely that eventually there are going to be a cluster of blocks mind suddenly and all at once which can wipe out the memory pool and process transactions very quickly so if you're waiting behind these other transactions and then you hit that lucky patch you could see the whole memory pool get cleaned out and your transaction does get processed so if I'm processing a transaction and this is the chart that I'm looking at I would probably pay a hundred and eleven Satoshi's per byte because all of these transactions are behind me and I have just these transactions that are in front of me and if I see two blocks mined in a row or three blocks find quickly my transaction will likely get in considering the savings and fees over is paying something in the green section of this chart that wait could definitely be worth it one last note is that this scale is in satoshis per byte which might not make sense for you depending on the wallet software that you're using if your wallet software isn't giving you a choice in satoshis per byte but rather asking you for your entire fee then you need to know how many bytes your transaction is you can also change this drop down instead of satoshis per byte to choose Bitcoin per byte here which can give you another angle so let's say your transaction is 224 bytes which is a typical transaction that's coming from one address and going to two addresses and I want to pay this fee about a hundred and ten satoshis per byte well that's point zero zero zero zero zero one bitcoins per byte in the transaction so if I multiply this number by 224 which is the number of bytes in the transaction that tells me how many Bitcoin I should type in as a fee using this trick and help you figure out just how much you should pay in fees without paying too much so once again take a look at this website Bitcoin fees earn comm this is what I do every time I'm sending a Bitcoin transaction you can often save a lot of money if you have any questions feel free to post in the comments below the video I'm Chronos thanks for watching you

32 thoughts on “How to Save Money on Bitcoin Transaction Fees”

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  2. love your explanation videos unlike others who just follow the hype of alt coins that not helping me gain knowledge. Thanks

  3. Hello, there. I'm very new to this. But I notice that I've paid just a few cents for the fees (using GreenAddress). Am I seeing something wrong here? When would I have to pay these exhorbitanting fees you're talking about?

  4. As far as I have read comments and done some basic research it seems like all the main wallets have removed this feature or option. Can you list some wallets that are secure that still offer this on their platform or are we doomed to just eat the high costs moving forward?

  5. I read this article: Would be interested to here you thoughts on.

  6. Hey, Im trying to send a small amount of bitcoin (100$) on exodus wallet to something and it is saying the bitcoin network fee is 27$. What can I do?

  7. I don't understand the byte size part. Can you give an example of how to figure the byte size? I want to send $100 to an address, how would I figure out the byte size?

  8. Is there a way to find out to and from how many addresses you will send prior to making the transaction in order to find out how much bytes your transaction will take? I had two transactions ( payments/outgoing ) from a coinomi wallet where a lot of small transactions arrive sitting in the line for a payment about 7 days. I payed 100sat/byte. They finally past and I m glad they did ! I found these links to be helpfull allready but couldn't find the exact answer there. The question is how to estimate the numer of in- and outputs. The formula is clear and speaks for itself. Thanks and thanks for your concise and to the point videos !

    "So if your transaction has in inputs and out outputs, the transaction size, in bytes will be:
    in*180 + out*34 + 10 plus or minus 'in'
    For example, this transaction has 40 inputs and 16 outputs. That gives us a transaction size of
    40*180 + 16*34 + 10 +- 40
    i.e. 7754 +- 40 bytes. The actual size is 7761 bytes."

  9. Most wallets won’t even let you choose the cheap trans fees for btc now. I hate btc fees it’s like stealing and BCH and other alts much much better.

  10. Cool video, but there is nothing that you can do when for instance, Coinbase or Bittrex have your bitcoins and they require a disgusting fixed high amount of fees from you to withdraw them…

  11. How long does it take for an unconfirmed transaction to expire? You should also point out that if you're not concerned about transaction time, you could set a low fee and just wait longer for confirmation provided the transaction doesn't expire. I've taken this approach for donations to Bitcoin addresses.

  12. BTC cannot scale with 1MB blocks. The Lightning Network white paper itself states that a 130MB block size limit would be necessary for mainstream adoption to be possible, even with various Layer 2 scaling options.

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