How to save on transaction fee : Wallets are giving us a wrong estimation

[protrader786]

Hello,

We all make a lot of transactions everyday. Our at most priority is to get our transactions confirmed as fast as possible because some providers don't allow us to use thier service untill the funds have received a fixed number of confirmations.

The wallets, be it hardware or software tend to give us fee estimation by default, showing us priorities as to which is the estimation of our transaction being picked up.

Usually:

• High Priority
• Medium Priority
• Low Priority

For beginner's who don't know what and how a bitcoin transaction works like, please refer to the following posts :

• How Bitcoin transactions work and what are their types? By wwzsocki
• Beginner's Guide to Transaction Fees By Upgrade00

So, I am not going to explain any of these. My priority is to show you how you can check if the fee suggested is what you need to go with or if can you get the same done with a lower fee.

How to do it :

Visit blockchair.com > bitcoin > click on outputs > select any one output > scroll down and click on the transaction hash.

Code:

 https://blockchair.com/bitcoin/outputs

You will see all the transaction details. We select an unconfirmed output so as to know the number of transactions that are currently in the pool that are yet to be picked up and confirmed. There are many other ways of doing this, I find this was of doing it easy for me.

I have selected a transaction for example :



In the above image you can see that 6k transactions are pending to be picked up in total in real time. This is just to get an idea of how many transactions are pending, how you can set or prioritise your fee.

The below is the current fee estimation :



I can confirm that these are correct and ledger hardware wallet also shows the same in real time at the moment.

So, I decided to go get my transaction confirmed with lower fee, looking that there are not many transactions pending on the network.

The first transaction :



In the above representation, you can see that the fee used was only 71sat/vB. The transaction got its first confirmation within 10 minutes, i.e, it was picked up in the very next block that was mined.

The second transaction :



Looking at it, a second transaction was made with only 20 sat/vB and guess what ? It was picked up in the next block that was mined too.

What you can do to save on fees :

• Use a wallet that lets you customise the fee
• Always check how congested the network is before making a transaction. You don't have to use the suggested fee always.

Conclusion

Wallets(Hardware,Software) have been set up with a algorithm that gives us the most accurate and elaborate fee at a current point of time so as to get a transaction happening in a deliberate manner. But this is not always the case that needs to be considered. In the above example you can see that the suggested fee was 136 sat/b to get it confirmed in the next few blocks, but we could get it done with 20% fee of what was suggested to us just by doing some research and looking at the current congestion.

I hope this guide will be of help to someone.

Thank you.

[o_e_l_e_o]

The number of pending transactions is more or less irrelevant. What is relevant is the size of all the pending transactions. 100 transactions of 200 vbytes each will fill up less space than a single transaction of 30,000 vbytes.

Further, denoting fees is USD per transaction is meaningless, for the exact reason that transactions can vary widely in size. A 10 cent fee may put a small transaction right at the tip of the mempool, while the same fee could put a much larger transaction right to the bottom of the mempool. Fees must be denoted in satoshi per virtual byte, or sats/vbyte.

The best way to estimate a fee is to look at one of the following sites:
https://jochen-hoenicke.de/queue/#1,8h
https://mempool.space/

[tranthidung]

• Bitcoin transaction fees (in sats/kb). Sunday, Saturday are best to move BTC (fee rate can be at 1 satoshi/ (v)byte at anytime but if you are lazy, you can move BTC in weekends. See my last update to know how to check it at Joehoe's site.)
• Make sure to avoid wasting BTC for too high fees – step by step guide (Electrum)
• Fees are low, use this opportunity to Consolidate your small inputs!
• Bitcoin Transaction Fees - Everything in one

To get cheap fee for your transactions, you have to do 2 things:

• Consolidate your small inputs (if you have some inputs)
• Choose right time at which fee rate is cheap (look at mempool)

Overally, you need to make your plan!
Always turn on RBF (Replace-by-Fee) so that you will be able to boost your transaction with higher fee later.


My advice on visual format for you:

• Please make your images smaller
• Make this forum a better place - part 1
• Bitcointalk posting etiquette

Don't leave over-large images in your quotes
It is very popular to see people quote, then instantly jump to write their replies without spending a couple of seconds to edit their quotes to avoid nested/pyramid quotes ^[11]. That is annoying. Beyond this, quoting over-large images without snip or adjust width / height of original images is more annoying, much more annoying than nested/pyramid quotes without images inside.

Because over-large images will require more unneccessary bandwith and more time to load pages. I don't think serious users will like to wait and see pages fully display after jumping up and down while loading.

Read some complaints and suggestions here:

• Feature suggestion - Turn embeded images into URLs + thread topic hijacking prev
• The inclusion of large, unnecessary images in threads. Opinions?

In fact, admin took action and restrict rights to display images from Junior Members and above ^[a] due to the kind of annoyance but you can help with your own efforts before admin does more serious restrictions.

^[a] Images in posts disabled for newbies

[RapTarX]

I'm using Electrum for a while now and it seems their fee estimation is good so far and I had no much problem with their estimation. Nevertheless, there are a few sites which you can use to estimate the necessary fee. I can't remember who wrote an article on median of cheap fee days and/or which hour is the best time for cheap tx. That would be good one to use for estimation.

[Lordhermes]

I can't remember who wrote an article on median of cheap fee days and/or which hour is the best time for cheap tx. That would be good one to use for estimation.

I have found the article here on the forum too, tranthidung wrote that and explained the reasons why Saturdays and Sundays are best for moving bitcoin. Here is the correct link for further knowledge and understanding.

The two best days are in the weekend:
.Sunday: ~ 6.5% lower fees (than median fees)
.Saturday: ~ 3.3 lower fees (than median fees)

Bitcoin transaction fees (in sats/kb). Sunday, Saturday are best to move BTC
I think the article above could also help in addition to OP estimation and explanation to reducing transaction fees.

[Mahdirakib]

Blockchain wallet have the option to use customize fee and I use this function to make sure that I'm not spending much fee to make a transaction. But bitcoin network become busy unexpectedly. So I prefer to use higher fee occasionally. If you make a transaction from coinbase wallet I can ensure you that your transition will be confirm on next block. They takes low and average fee. And send the tx as a batch transaction with others. All together they use enough fee which provide higher priority to get confirmation fast.

[pakhitheboss]

The simplest available option to reduce the transaction fee for Bitcoin is to use the Bitcoin lightning Network. LN transaction fees are far less to what you are paying now. Start using wallets that support LN like Electrum, Blue wallets, and others.

When you have the option of paying less fee, why not utilize it. There is are so many threads related LN in this forum you can go ahead and read them.

For reference you can check this thread.

Electrum LN

The best part of LN is that the fee is less and the transaction is instant. You do not have to wait for 3 hours or more like in other wallets that do not support LN when you pay less fee.

[Pmalek]

Most of the time, people tend to use higher fees than needed because they are afraid that if they don't get a quick confirmation they will lose their Bitcoin. This is unnecessary and low fees are enough in many situations.

As o_e_l_e_o said, just use https://jochen-hoenicke.de/queue/#1,2h. Scroll down to the last graph titled Mempool size in MB and place your mouse at the tip. You will see the size of unconfirmed transactions in the mempool.

At the moment of writing, that size was 0.32 MB. That means that even a 1 sat/vbyte transaction will most likely get confirmed in the next block (unless there is a sudden surge in Bitcoin transactions with higher fees). If you used 2 sat/vbyte, you would have overpaid by 100%.

[khaled0111]

...

Honestly, I wouldn't recommend using any of the wallets you mentioned especially coinbase. It may be a good and reputable exchange but shouldn't be used as a personal wallet although it charges less fees compared to other exchanges.

The simplest available option to reduce the transaction fee for Bitcoin is to use the Bitcoin lightning Network...

Using the lightning network isn't always an option. The one you are going to send coins to must be accepting lightning payments. Besides, if you are going to use LN just for one transaction then it will cost more than a regular on-chain transaction.

[sheenshane]

The best way to estimate a fee is to look at one of the following sites:
https://jochen-hoenicke.de/queue/#1,8h
https://mempool.space/

These are the most tools where I'm going to visit when I'm planning to have a single transaction or even a microtransaction. Sometimes I'd annoyed when I can't even know how to calculate or determine the fees in the simplest mathetics calculation. That's why I visit the sites mentioned above for the Bitcoin transaction fee for reference.

I seldom use the wallet that mentioned by the OP, I preferred using SegWit wallets because they are most commonly have the cheapest fees than the custodial wallet. These kinds of the wallet have their own Bitcoin estimator that auto calculate the fee as a suggested by the wallet and it depends on the mempool congestion not just by the Bitcoin wallet that makes Bitcoin transaction fee will reduce.

You can do the math by your won using this Bitcoin Fee Calculator & Estimator and compare this to the Bitcoin wallet you have used.

[o_e_l_e_o]

At the moment of writing, that size was 0.32 MB. That means that even a 1 sat/vbyte transaction will most likely get confirmed in the next block (unless there is a sudden surge in Bitcoin transactions with higher fees).

This is true, provided the next block comes within the next few minutes. As you can see from the slope of the graph on your screenshot, the mempool is filling up quickly, and within 10 minutes (the average time to the next block) 1 sat/vbyte would almost certainly be pushed out of the next block.

I preferred using SegWit wallets because they are most commonly have a cheapest fees than the custodial wallet.

Wallets are not SegWit or non-SegWit; addresses are. Some wallets do not support SegWit addresses yet, but the wallet itself cannot be described as SegWit or non-SegWit.

These kinds of the wallet have their own Bitcoin estimator that auto calculate the fee as a suggested by the wallet and it depends on the mempool congestion not just by the Bitcoin wallet that makes Bitcoin transaction fee will reduce.

The wallet you use to make a transaction is irrelevant to the fee you pay, unless that wallet does not let you pick your own fee. As long as you can choose a fee, then the same transaction with the same fee will be just as fast to confirm regardless of what wallet it was broadcast from.