@ -202,13 +202,13 @@ The sequence number is used to override a transaction prior to the expiration of
((("fees, transaction", id="ix_ch05-asciidoc6", range="startofrange")))Most transactions include transaction fees, which compensate the bitcoin miners for securing the network. Mining and the fees and rewards collected by miners are discussed in more detail in <<ch8>>. This section examines how transaction fees are included in a typical transaction. Most wallets calculate and include transaction fees automatically. However, if you are constructing transactions programmatically, or using a command-line interface, you must manually account for and include these fees.
Transaction fees serve as an incentive to include (mine) a transaction into the next block and also as a disincentive against "spam" transactions or any kind of abuse of the system, by imposing a small cost on every transaction. Transaction fees, are collected by the miner who mines the block that records the transaction on the blockchain.
Transaction fees serve as an incentive to include (mine) a transaction into the next block and also as a disincentive against "spam" transactions or any kind of abuse of the system, by imposing a small cost on every transaction. Transaction fees are collected by the miner who mines the block that records the transaction on the blockchain.
((("fees, transaction","calculating")))Transaction fees are calculated based on the size of the transaction in kilobytes, not the value of the transaction in bitcoin. Overall, transaction fees are set based on market forces within the bitcoin network. Miners prioritize transactions based on many different criteria, including fees, and may even process transactions for free under certain circumstances. Transaction fees affect the processing priority, meaning that a transaction with sufficient fees is likely to be included in the next-most mined block, whereas a transaction with insufficient or no fees may be delayed, on a best-effort basis and processed after a few blocks or not at all. Transaction fees are not mandatory, and transactions without fees may be processed eventually; however, including transaction fees encourages priority processing.
((("fees, transaction","calculating")))Transaction fees are calculated based on the size of the transaction in kilobytes, not the value of the transaction in bitcoin. Overall, transaction fees are set based on market forces within the bitcoin network. Miners prioritize transactions based on many different criteria, including fees, and might even process transactions for free under certain circumstances. Transaction fees affect the processing priority, meaning that a transaction with sufficient fees is likely to be included in the next-most–mined block, whereas a transaction with insufficient or no fees might be delayed, processed on a best-effort basis after a few blocks, or not processed at all. Transaction fees are not mandatory, and transactions without fees might be processed eventually; however, including transaction fees encourages priority processing.
Over time, the way transaction fees are calculated and the effect they have on transaction prioritization has been evolving. At first, transaction fees were fixed and constant across the network. Gradually, the fee structure has been relaxed so that it may be influenced by market forces, based on network capacity and transaction volume. The current minimum transaction fee is fixed at 0.0001 bitcoin or a tenth of a milli-bitcoin per kilobyte, recently decreased from one milli-bitcoin. Most transactions are less than one kilobyte; however, those with multiple inputs or outputs can be larger. In future revisions of the bitcoin protocol it is expected that wallet applications will use statistical analysis to calculate the most appropriate fee to attach to a transaction based on the average fees of recent transactions.
Over time, the way transaction fees are calculated and the effect they have on transaction prioritization has been evolving. At first, transaction fees were fixed and constant across the network. Gradually, the fee structure has been relaxed so that it may be influenced by market forces, based on network capacity and transaction volume. The current minimum transaction fee is fixed at 0.0001 bitcoin or a tenth of a milli-bitcoin per kilobyte, recently decreased from one milli-bitcoin. Most transactions are less than one kilobyte; however, those with multiple inputs or outputs can be larger. In future revisions of the bitcoin protocol, it is expected that wallet applications will use statistical analysis to calculate the most appropriate fee to attach to a transaction based on the average fees of recent transactions.
The current algorithm used by miners to prioritize transactions for inclusion in a block based on their fees is examined in detail in <<mining>>.(((range="endofrange", startref="ix_ch05-asciidoc6")))
The current algorithm used by miners to prioritize transactions for inclusion in a block based on their fees is examined in detail in <<ch8>>.(((range="endofrange", startref="ix_ch05-asciidoc6")))
==== Adding Fees to Transactions
@ -227,7 +227,7 @@ For example, if you consume a 20-bitcoin UTXO to make a 1-bitcoin payment, you m
[WARNING]
====
If you forget to add a change output in a manually constructed transaction, you will be paying the change as a transaction fee. "Keep the change!" may not be what you intended.
If you forget to add a change output in a manually constructed transaction, you will be paying the change as a transaction fee. "Keep the change!" might not be what you intended.
====
Let's see how this works in practice, by looking at Alice's coffee purchase again. Alice wants to spend 0.015 bitcoin to pay for coffee. To ensure this transaction is processed promptly, she will want to include a transaction fee, say 0.001. That will mean that the total cost of the transaction will be 0.016. Her wallet must therefore source a set of UTXO that adds up to 0.016 bitcoin or more and, if necessary, create change. Let's say her wallet has a 0.2-bitcoin UTXO available. It will therefore need to consume this UTXO, create one output to Bob's Cafe for 0.015, and a second output with 0.184 bitcoin in change back to her own wallet, leaving 0.001 bitcoin unallocated, as an implicit fee for the transaction.
myarbrough@oreilly.com
10 years ago