SUMMARY- Mempool is the best option. It's much better than ETA and Static but always double check mempool to compare it with given estimation from Electrum wallet.
- If you know what you are doing, are aware of mempool (volatile memory), you can use any option because with any option, you are free to customize your fee. After your initial broadcast, you can bump your transaction fee later if you want to have faster confirmation.
- Reminder: Electrum uses sat/vbyte for fee rate but its label is in sat/byte and has yet been corrected by Electrum developers. That issue
Your transaction fee will be decided by transaction size, fee rate. You can save transaction fee by using either lower fee rate or reducing your transaction size.
- Transaction fee = Transaction size * Fee rate
Let's discover it, step by step!
TRANSACTION SIZEYou can reduce your transaction fee by reduce its size that requires you to know how to use your inputs and outputs effectively.
For inputs, you can reduce the input number by consolidate your small inputs when network is not at high demand from users. Then you can make consolidation with very cheap fee rate.
For outputs, it depends on how many senders you will send your coins too with your sending transaction, including your own change address as part of outputs.
Generally, you can reduce transaction size by using Segwit address (Bech32) that starts with bc1q. Since its deployment in 2017, many wallets and later centralized exchanges support that wallet type.
Please use some Bitcoin Transaction Size Calculators at Reference (bottom) to understand it better.
A strong reminder, you can use centralized exchanges that support Segwit but you should not rely on them. Storing your coins on centralized exchanges, with custodial wallets, is extremely risky.
Let’s control your coins by non-custodial wallets like Electrum, Bitcoin Core wallets. In this guide, I present only Electrum wallet as it fits with newbies and their limited resources for wallet storage.
FEE RATENow, let’s move on to fee rate. What is best fee rate for you to use?
It depends on your need.
If you want to move your coins within a short time like 10 or 20 minutes (~ 1 or 2 next blocks), you will have to pay expensive fee at that moment.
If you are not hurry and can wait longer, you can use lower fee rate and wait for like 1 hour (next 6 bocks) or even longer like 12 hours or 24 hours. Remember that if you use too low fee rate, your transaction will be at bottom of mempools and waiting time will be up to 14 days (2 weeks or 2016 blocks). After that, if your transaction is still not confirmed, there is possibility that it will be dropped from mempools.
Note that not all mempools will drop your transaction but some will. That leads to a need that you might see your transaction is Failed, then you will have to re-broadcast it.
Be aware of this risk and avoid to choose extremely low fee rate. If you only need to consolidate your inputs, don’t do this when network is in high demand. Just observe mempools and choose good times to broadcast your transactions.
WHERE TO CHECK FEE RATES?Check it in mempools. There are some websites to do that but I’d like to recommend two sites:
With mempool.space, you can choose chart option to have better overview. If you are new with this experience, use their main page and get default given information.
The second site, Joe-hoe, is more advanced but it is more helpful.
Now, how to use it?
Block time is about 10 minutes in average. When you broadcast your transaction, it will appear in mempools. Then miners will pick transactions that can give them most beneficial transaction fees (with highest fee rates and biggest sizes). They will prioritize such transactions, and 1 block equals to 1 vMB from tip of mempool.
Hovering the mouse on the mempool chart, you will see different fee bands (in different colors) and corresponding size of waiting transactions within that fee band. Let’s consider and choose a fee band that matches you.
HOW TO CHOOSE FEE RATE WITH ELECTRUM WALLET?In Electrum wallet, you will have three options when broadcasting your transactions: ETA, Mempool, and Static. Let’s dig into each of them.
Turn on Edit fee manually.
ETAWhat does ETA means? It is Estimate Time of Arrival. It means something. It is only estimation of arrival time or first confirmation time for your transaction.
Mempool is lively up and down, so an estimation at the time you broadcast your transaction can be not correct. The actual confirmation time can be longer or shorter than ETA if mempool is up or down, respectively. ETA gives you estimations in time like 30 minutes, 1 hour, etc.
This is disadvantage of ETA option. It usually will cost you more than Mempool and Static options.
MempoolMempool is an option which gives you information in how many waiting blocks for your first confirmation, such as within next 1-2 blocks, next 10 blocks, 25 blocks, etc.
It is a better option than ETA. You will have less likely overpay fee for your transaction.
StaticThis option is useful when you comprehensively know what you are doing. It is helpful when you only make your transactions when mempool drops to your favorite fee rate.
When you use this option, with your experience and mempool observation, you won’t overpay fee for sure.
ComparisonCompare three options and see difference, ETA and Static options provide overpaid fee than Mempool option. All of them are estimations because we don't know how mempools will become in next 100 minutes.
Within 10 blocks
- ETA: 106.3 sat/vbyte
- Static: 100 sat/vbyte
- Mempool: 14.5 sat/vbyte
Double check with
https://jochen-hoenicke.de/queue/#BTC%20(default%20mempool),8h,weightI checked it yesterday and again, Mempool option is the best.
Use Electrum wallet on mobile (Android) like your hot wallet and store small fraction of bitcoin there, security-wise.
On mobile, you can check mempool by tapping on Network, then tap on any point on the fee color stripe (left is from tip of mempool, right is bottom of it). You can install Electrum and create an empty wallet on your mobile and use it only for mempool checking.
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