How are fees (and fee errors) assigned to Bitcoin transactions?

[Myfe]

How are fees assigned to Bitcoin transactions?

Is there a standard % by transaction size?

Also, I've read about two instances on this forum where someone has been charged BTC1 or BTC2.5 fee for transactions! Obviously this is way to much, how does an error like this happen?

Reference to specific instances:

• https://bitcointalk.org/index.php?topic=1818791.0
• https://bitcointalk.org/index.php?topic=1808376.0

[LittleBitFunny]

Fees aren't assigned to Bitcoin transactions, they're chosen by the user.  Due to mining being privately operated, miners aim for whichever transaction will earn them the most profit - this is the transaction with the highest fees, as mining a block will result in the same reward of new Bitcoin for each miner plus the transaction fees for each transaction.

The confusion might come from dynamic fees - many wallets automatically customize the fees that are used to try and get your transaction confirmed in a reasonable amount of time.  If you have the Blockchain wallet for example, you can select the Advanced option during your transaction and customize your fees to get it confirmed faster.

It definitely isn't a percentage of the total though, because it's not about how much Bitcoin is being trasnsferred, it's about the size of the transaction in bytes.  Really large transactions do take up a lot of bytes, but if you were paying 0.000001 Bitcoin to someone you would have to pay a fee much higher than what you were sending because the transaction would still have a size.

There are no instances where people have been charged BTC1 for transactions as far as I know as that would be over $1000.  They could accidentally set their fees too high themselves, but that's extremely unlikely.  Fees however are currently very high as there are too many transactions for the network to handle - this has resulted in debates about how scalable Bitcoin is and solutions such as SegWit and Bitcoin Unlimited.


EDIT: I've now seen where you got the BTC2.5 fee from.  This is a very unlikely mistake - you will nearly definitely be fine, especially if you don't have that much BTC.

[alonmuroch]

Every transaction has inputs and outputs. The positive difference between them is the fee you are giving the miner.
Most wallets calculate the fee for you to make sure your transaction will be included in a block.

[Senor.Bla]

This depends on the wallet you use. There are some wallets that let you pick the exact fee by yourself. Other Wallets give you 3 or 4 options on how fast the transaction needs to be confirmed and chose the fee accordingly.
Basically the size of your transaction is the main parameter as to how expensive it'll be.
Wallets look at the transaction made and what people pay and then calculate what sat/kB is sufficient to get in the next block.

If you want more information, which will be more complex just ask and i'll explain.

if someone pays a way to high fee like in your examples, then they most likely use a wallet where they could pick the fee by themselves and made a mistake.

[Myfe]

you will nearly definitely be fine, especially if you don't have that much BTC.

How much is "don't have that much BTC"...and are you referring to balance per transaction?

[Myfe]

if someone pays a way to high fee like in your examples, then they most likely use a wallet where they could pick the fee by themselves and made a mistake.

Which wallets allow users/owners to set their own fees?


Thanks to everyone for the helpful answers. I love the education!

[Senor.Bla]

if someone pays a way to high fee like in your examples, then they most likely use a wallet where they could pick the fee by themselves and made a mistake.

Which wallets allow users/owners to set their own fees?


Thanks to everyone for the helpful answers. I love the education!

Good question. I don't know all the wallets, so i can't make a list for you. Electrum uses it for example, so does Green Address if i recall correctly. What kind of wallet? Online, Hardware, Desktop or mobile? Which OS? And then i guess you have to check or google it.

[sportis]

if someone pays a way to high fee like in your examples, then they most likely use a wallet where they could pick the fee by themselves and made a mistake.

Which wallets allow users/owners to set their own fees?


Thanks to everyone for the helpful answers. I love the education!

From these which I really know because I have already and currently use are: As web wallet the blockchain.info which propose the fees according the confirmation time but user can customize it according his own preference. As a practical advice from my experience using this wallet some times in the recent past you have do not rely its algorithm because for fast confirmation today proposes about 140sat/byte unlike https://bitcoinfees.21.co/ proposes about 220sat/byte.Then the electrum desktop wallet where the user can put the fees which is willing to pay according the blocks can wait until the first confirmation. After that Armory, Core at sure give this choice but I haven't use it.