Bitcoin transactions - how to reduce fees?

[biggbox]

Hi


I use Electrum wallet. When I first started out with Bitcoin, I assign a new receiving address for every provider that I uses: for instance, cloud mining fund receiving account, I use address 1, transaction with seller @ certain website, I use address 2, receiving funds from BTCJam, I use address 3.

End of the month, if I need to push the coins to an exchange for whatever reasons, the transaction fees can be quite high.


So I thought, perhaps fees can be lowered by just using one address to receive funds. So I consolidate all my accounts and set only to one common receiving address. But to my shock, when I push the coins to my exchange, the transaction fees are still as high! It is almost no difference from using multiple receiving addresses

Any experts could give advice and opinions?


Thank you.

[OmegaStarScream]

You should be able to change the fees on the settings on Electrum however it's not recommended unless you know what you are really doing , because if the fees are low then it should be or zero then the transaction may stuck and never get confirmed and it may need few days to come back to you so It's better to leave Electrum make the calculation and set the fees .

[twister]

when I push the coins to my exchange, the transaction fees are still as high! It is almost no difference from using multiple receiving addresses

Define high?

You can set the transaction fee to dynamic with the lowest fee possible and then the electrum will choose what fee to add, but do remember that it will make you transactions low/medium priority and may take hours to confirm. Or just add 10k Satoshi fee/KB and all your transactions will be sent with that and they will be high priority and confirm normally. There is also an option in electrum to manually enter the fee but as I said, low fee may get your transaction stuck with no confirmations for a long time. If you think about it, 10k Satoshi fee/KB is not that high.

[Slark]

And how exactly high are your transaction fees? Because if you are not collecting dust on your wallet there should not be a problem with high transaction fees.
Don't manually lower transaction fee, because it can cause more problems later with processing of your transactions.

Maybe you are mistaken and think that your fees are high while in reality it is standard transaction fees and you just need to cope with it.

[Pierre 2]

You should be able to change the fees on the settings on Electrum however it's not recommended unless you know what you are really doing , because if the fees are low then it should be or zero then the transaction may stuck and never get confirmed and it may need few days to come back to you so It's better to leave Electrum make the calculation and set the fees .

I agree with this, Electrum adjusts it so well you should not even worry about fees.
Just go dynamic fees and pull it to lowest. It will not take so much fee.

[Small]

You should be able to change the fees on the settings on Electrum however it's not recommended unless you know what you are really doing , because if the fees are low then it should be or zero then the transaction may stuck and never get confirmed and it may need few days to come back to you so It's better to leave Electrum make the calculation and set the fees .

Changing fee isn't very difficulty nor dangerous. It would be fine for most people to adjust their fee as long as they keep it above 0.00005BTC/KB. Zero or low transaction fee transactions will eventually confirm if you broadcast it continuously as the coin age will rise. Only when Electrum or any other third party doesn't rebroadcast, the transation can be forgotten by the mempool.

And how exactly high are your transaction fees? Because if you are not collecting dust on your wallet there should not be a problem with high transaction fees.
-snip-

Even if you're not collecting dust, with lots of inputs, the size will rise. Although dusts are most commonly associated with higher fees but it isn't completely true.

[biggbox]

when I push the coins to my exchange, the transaction fees are still as high! It is almost no difference from using multiple receiving addresses

Define high?

You can set the transaction fee to dynamic with the lowest fee possible and then the electrum will choose what fee to add, but do remember that it will make you transactions low/medium priority and may take hours to confirm. Or just add 10k Satoshi fee/KB and all your transactions will be sent with that and they will be high priority and confirm normally. There is also an option in electrum to manually enter the fee but as I said, low fee may get your transaction stuck with no confirmations for a long time. If you think about it, 10k Satoshi fee/KB is not that high.

Even though I use a common address to do transactions, electrum will throw a warning message when I tried to send all coins "Warning: The transaction fees are unusually high".

When I go to the block chain to look through my transactions, I realised my common address has many outputs after I tried to send all coins. My question is: Aren't all transactions at a common address "merged" or "flattened"?   

Please take a look at a sample screen capture:

[biggbox]

This is my electrum fee settings. Am I overdoing it?  I ever tried to send with minimum fees, and the transaction took eons to clear. 

[NorrisK]

This is my electrum fee settings. Am I overdoing it?  I ever tried to send with minimum fees, and the transaction took eons to clear. 

That is around 8 dollar cents per kb. Do you really think that is that high?

It is more than the recommended 10k satoshi though. Maybe just turn of dynamic fees and put it at 10.000 per kb.

[Small]

This is my electrum fee settings. Am I overdoing it?   I ever tried to send with minimum fees, and the transaction took eons to clear.  

Judging from the amount of inputs you have, the size of your transaction is huge. Since miners uses fees/kb for their calculation of priority, the fees in total would be higher if the client wants it to be confirmed ASAP. Regarding the 0.0001BTC/kb fees, it can be affected by the network load and if miners would be willing to accept it. If you base it on a service which calculates the fees, it isn't fully accurate if the transaction is not seen by it. I would just put 0.0001BTC/KB or go to https://www.blocktrail.com/BTC and add the optimal fee in.

Note: If blocks/Blocks with only coinbase transactions are mined regularly, no transaction can be confirmed till the network relays a valid block with transactions other than coinbase is included.

[shorena]

-snip-
When I go to the block chain to look through my transactions, I realised my common address has many outputs after I tried to send all coins. My question is: Aren't all transactions at a common address "merged" or "flattened"?   
-snip-

Nope. It does not matter if you receive coins on a different address or not. Each time you receive coins its an input you can use later. If you dont combine the inputs in advance (and pay a fee for doing so in a TX) they will increase the size of the TX in byte which increases the fee.

What you can do - maybe - to lower the fees is the to lower the number of inputs. If you get them by withdrawing from services, consider withdrawing less often.

[biggbox]

Nope. It does not matter if you receive coins on a different address or not. Each time you receive coins its an input you can use later. If you dont combine the inputs in advance (and pay a fee for doing so in a TX) they will increase the size of the TX in byte which increases the fee.

What you can do - maybe - to lower the fees is the to lower the number of inputs. If you get them by withdrawing from services, consider withdrawing less often.

You have many inputs (because you're collecting dust), so transaction fees is very high. So, common address isn't involved much in this case.
So, your transaction size become very big & transaction fees is very high.

Solution, lower your TX fee. But, your transaction will be confirmed longer or won't confirmed.

Judging from the amount of inputs you have, the size of your transaction is huge. Since miners uses fees/kb for their calculation of priority, the fees in total would be higher if the client wants it to be confirmed ASAP. Regarding the 0.0001BTC/kb fees, it can be affected by the network load and if miners would be willing to accept it. If you base it on a service which calculates the fees, it isn't fully accurate if the transaction is not seen by it. I would just put 0.0001BTC/KB or go to https://www.blocktrail.com/BTC and add the optimal fee in.

Note: If blocks/Blocks with only coinbase transactions are mined regularly, no transaction can be confirmed till the network relays a valid block with transactions other than coinbase is included.

That is around 8 dollar cents per kb. Do you really think that is that high?

It is more than the recommended 10k satoshi though. Maybe just turn of dynamic fees and put it at 10.000 per kb.

Hi all, Thank you very much for the inputs. I think I get it now. :-) I naively believed all the transactions to a common address will be merged/flattened.

Another question: So, it does not matter what wallet I use? Does it help if I were to use only blockchain.info wallet?

[Small]

-snip-

Hi all, Thank you very much for the inputs. I think I get it now. :-) I naively believed all the transactions to a common address will be merged/flattened.

Another question: So, it does not matter what wallet I use? Does it help if I were to use only blockchain.info wallet?

Probably no. Both Blockchain.info and Electrum uses compressed keys which does help in terms of the size of the inputs. Some service do pay the transaction fees for their customers but they may have rules you have to follow e.g. no transactions related to gambling.

[shorena]

-snip-
Another question: So, it does not matter what wallet I use? Does it help if I were to use only blockchain.info wallet?

No, its a network thing. There are services that pay the fee for you though like Xapo. I dont use it though so I am not sure what the catch is.

[odolvlobo]

The amount of the fee that is required to get into the next block is determined by the miner, not the wallet.

Some wallets try to figure out what the minimum fee might be, some require you to decide what to pay, and some are set by the developer.

[bitcoinmarkets]

pool transactions

[DannyHamilton]

Another question: So, it does not matter what wallet I use? Does it help if I were to use only blockchain.info wallet?

If you use a wallet where the bitcoins are under your full control (such as electrum, multibit, bitcoin core, blockchain.info, etc), then it is up to you to manage the transactions the way you want to.  You can try to make arrangements to have larger amounts of bitcoins paid you you less frequently so that you have less inputs.  You can use high value inputs to "sweep" up some dust on a regular basis without any fee at all and hope that the high value input has enough priority to get confirmed in a reasonable amount of time. You can just send transactions with insufficient fees and hope that some miner (or mining pool) will confirm the transaction for you anyhow.

Another option is to get an account with a service (such as coinbase).  In this case the addresses (and bitcoins) are actually under the control of the service.  They can manage the inputs and sweep them or use them in ways that reduce their transaction costs.  If they are well managed they may pass those savings on to you (for example by paying the transaction fee for you).

[bitcoinboy12]

I think if you decreasing the minimum transaction fee your priority will be decrease too.So i think its better to stay on default transaction fee....

[blackmachinegun]

The bitcoin developers are about to reduce the transaction fees on the bitcoin network tenfold, thanks to the relatively high value of the digital currency.
Transaction fees are small amounts paid to send bitcoin transactions around the network (think of them like postage stamps) and to get miners to confirm them by including them in a mining block. They're paid in satoshis (tiny amounts of bitcoins), which means that as the price of bitcoin rises, the transaction fees get higher.

[HeroCat]

Just make new BTC Web wallet here - http://blockchain.info and then the standart transaction fee will be 0.0001 BTC per transaction. Simple and smart decision, plus you can also use one BTC address - it will save on sending fees  And for larger BTC volumes - buy Trezor, which is safe decision