Newbie question - transaction fees

[pomme7000]

So I'm watching a video where Andreas Antonopoulos explains how bitcoin transactions are structured. I think I understand the input side (the spending side), and I think I understand the output side (the recipient address and the change address). But I'm confused about the transaction fee paid to the miner.

Andreas says the input side (eg, 100,000 satoshi) will not be equal to the output side (eg, 98,000 satoshi). He said the difference is the transaction fee paid to the miner (2,000 in this example), but this fee does not appear in the transaction.

If I understood Andreas correctly, I'm confused about this. Doesn't the transaction fee need to go to the miner's public bitcoin address? If it's not specified in the transaction (as an output), where is it? I assume it must be somewhere on the blockchain?

Thanks.

[moonie]

The transaction fee is added to the Coinbase subsidy (block reward) by the miner, based on total fees contributed by the transactions within the block itself. This way, transactions don't have to send the fees to the miner directly.

Block Reward = (Base block reward + tx fees)

[Cryptoprincess101]

Lol, actually it is just same as the charges normal banking platforms do charge for a transaction their customer made so for cryptocurrency, the transaction fees goes directly to the makers ( depending on the wallet, either a self custody wallet or an exchange wallet) so these makers (also known as owners of those exchanges or self custody wallet) are the people that receives the transaction fees and then pay lesser fees to miners for the transactions you made to be included in the next block so that is how the system works, there is no special address that receives those mining fees. Lol

[Charles-Tim]

Andreas says the input side (eg, 100,000 satoshi) will not be equal to the output side (eg, 98,000 satoshi). He said the difference is the transaction fee paid to the miner (2,000 in this example), but this fee does not appear in the transaction.

If you check blockchain explorer, you will see the transaction fee of the transaction.

Also on some wallets, like Electrum wallet. You can click on the transaction details to check the transaction fee. So you will see the transaction fee.

[Zaguru12]

Andreas says the input side (eg, 100,000 satoshi) will not be equal to the output side (eg, 98,000 satoshi). He said the difference is the transaction fee paid to the miner (2,000 in this example), but this fee does not appear in the transaction.

It simply just like how banks work, you can’t send out all that you have to the recipient address because the miner fee needs to be deducted from it. Most wallets are configured to reject the broadcast of the transaction without the miner fees.

If I understood Andreas correctly, I'm confused about this. Doesn't the transaction fee need to go to the miner's public bitcoin address? If it's not specified in the transaction (as an output), where is it? I assume it must be somewhere on the blockchain?

The block in which your transaction was added has a special transaction which is usually the first transaction on the block which is called the coinbase transaction it is use to claim the incentives from mining a block and transaction fees of the added transactions, it has just one input which is the claiming incentives. This transaction is actually added by the miner themselves so when the transaction you sent goes to the intended output the fee goes to the Coinbase transaction of the miner. This transaction (coinbase transaction) is unique in such way that the transaction cannot be spent until it has about 100 confirmations I.e below hundred blocks

[Mia Chloe]

Nice question op I get the direction where your question is coming from. When you make a transaction, your wallet, if it is an HD wallet will collect input from all the addresses available with balance if one address isn't enough to pay for the transaction. And that is the input you see. For the output, it's where the coins go after the combination the first one goes to the wallet or wallets you are sending to while the other go to a change address after fees have been deducted.

Now where you are getting it wrong is expecting the miners receiving address to display in your hash but it doesn't work that way. The fees go the the mining pools address but it's not visible via your transaction hash because your transaction hash is meant to display and show data and Time stamps for only your addresses and not the mining polls address.

[pomme7000]

Now where you are getting it wrong is expecting the miners receiving address to display in your hash but it doesn't work that way. The fees go the the mining pools address but it's not visible via your transaction hash because your transaction hash is meant to display and show data and Time stamps for only your addresses and not the mining polls address.

Let me see if I understand what you are saying. Within blockchain explorer, I know how to find the fee for a given transaction within a block. And I know how to see the total reward (base reward + fee reward) for writing the entire block.

So if the fees do not appear in my individual hash (and in all the other individuals hashes within the block), I assume there must be a separate, unique transaction that records the total reward for the miner. Correct? What does this transaction look like? Does it also have inputs and outputs?

[Cricktor]

Assume the following:
The next mined block only contains three transactions. The first is always the mandatory required coinbase transaction rewarding the miner with the block subsidy plus the transaction fees of all the transactions in the block, in this example case there are only two transactions besides the coinbase transaction.

The rule for the transaction fee calculation is simple: transaction fee equals sum(all inputs) minus sum(all outputs)

Let's use some real numbers:
Transaction no.1 is spending 1.0 Bitcoin to two outputs which sum up to 0.99 Bitcoin (i.e. fee is 0.01 Bitcoin for this transaction).
Transaction no.2 is spending 2.0 Bitcoin to three outputs which sum up to 1.985 Bitcoin (i.e. fee is 0.015 Bitcoin for this transaction).

The miner's coinbase transaction therefore transfers 3.125 + (0.01 + 0.015) Bitcoins to miner's address (total sum is 3.15BTC).

The miner can't add more transaction fee than are actually "paid" in the block's transaction, otherwise the block would become invalid and rejected by honest nodes.

The miner could add less than sum of block's transaction fees or block subsidy than max. allowed, which doesn't make any economic sense, but isn't forbidden. This would burn some coins forever which happened deliberately in very few cases in the past. There were few likely not deliberate errors involved. If a miner doesn't test his software shit properly, he usually looses coins (happened in the past eg. when a certain mining pool mined two(!) invalid blocks; the faults weren't about proper fee calculation though).

[Mia Chloe]

Let me see if I understand what you are saying. Within blockchain explorer, I know how to find the fee for a given transaction within a block. And I know how to see the total reward (base reward + fee reward) for writing the entire block.

So if the fees do not appear in my individual hash (and in all the other individuals hashes within the block), I assume there must be a separate, unique transaction that records the total reward for the miner. Correct? What does this transaction look like? Does it also have inputs and outputs?

Yes if you should check the mining pools address you'll see the coins sitting there however it doesn't have an input and output since the coins were not spent by a transaction. However the miners coins will have a transaction hash because it is a reference to the origin of the coin and when I mean origin I'm referring to POW and timestamp data.
The POW data tells where the coins come from this is to prevent any coin from being faked and spent on the network. The timestamp shows the time and date about the origins of the coins.

[pomme7000]

Yes if you should check the mining pools address you'll see the coins sitting there however it doesn't have an input and output since the coins were not spent by a transaction. However the miners coins will have a transaction hash because it is a reference to the origin of the coin and when I mean origin I'm referring to POW and timestamp data.
The POW data tells where the coins come from this is to prevent any coin from being faked and spent on the network. The timestamp shows the time and date about the origins of the coins.

Great. I get what you are saying, and thank you to all of you who responded!

[BitMaxz]

Also on some wallets, like Electrum wallet. You can click on the transaction details to check the transaction fee. So you will see the transaction fee.

I think he pointed to transaction fees and why it's not included on outputs/inputs and he might think once the transaction is confirmed the miner's BTC address will be included on the in/outputs where the fees are sent to.

@OP It seems you're a bit confused about the 2000 sats fee in your transaction where it goes. The transaction fee won't appear as an input or output on the block explorer instead it's shown separately as "fees.".
By checking the transaction below as a sample you can find which mining pool received the fee by looking at the details of the block that includes your transaction. The mining pool that successfully mines the block collects the transaction fees as their incentive(reward) for securing the network.

- https://mempool.space/tx/1355e886c51aa3a74756b0d4177723af34495e31b4d6e7d7d7071c8450678c6f

[khaled0111]

Let me see if I understand what you are saying. Within blockchain explorer, I know how to find the fee for a given transaction within a block. And I know how to see the total reward (base reward + fee reward) for writing the entire block.

The transaction fee is not explicitly stored in the transaction raw data. The tool you use to view the transaction details ( be it a block explorer, wallet..) can easily determine how much the transaction is paying in fees by deducting the sum of all outputs from the some of all inputs. Then it can calculatethe fee rate by deviding the fee by the transaction size/weight.

So if the fees do not appear in my individual hash (and in all the other individuals hashes within the block), I assume there must be a separate, unique transaction that records the total reward for the miner. Correct? What does this transaction look like? Does it also have inputs and outputs?

Yes, it’s called a coinbase transaction. Here is an example of a coinbase transaction:
https://mempool.space/fr/tx/3ab4289f8e56c7eb32b8807720906808462e5e82159937f40919b4a6df9cdce0?mode=details

[BlackBoss_]

Transaction fees can help you understand about it more.

Andreas says the input side (eg, 100,000 satoshi) will not be equal to the output side (eg, 98,000 satoshi). He said the difference is the transaction fee paid to the miner (2,000 in this example), but this fee does not appear in the transaction.

With Bitcoin blockchain, when you make an on chain transaction, you will have to pay transaction fee to Bitcoin miners who confirm your transaction. So input value = output value + transaction fee cost.

Even if you send bitcoins from your address to another address of yours, you will not receive the same input value as your receiving value, because as said, there is a part goes to Bitcoin miners as transaction fee.

[nc50lc]

Yes if you should check the mining pools address you'll see the coins sitting there however it doesn't have an input and output since the coins were not spent by a transaction. However the miners coins will have a transaction hash because it is a reference to the origin of the coin and when I mean origin I'm referring to POW and timestamp data.
The POW data tells where the coins come from this is to prevent any coin from being faked and spent on the network. The timestamp shows the time and date about the origins of the coins.

Great. I get what you are saying, and thank you to all of you who responded!

I don't know why you chose to reply to those particular replies but it's "not great" since it misleading actually.

-The coinbase transaction's hash doesn't represent POW or timestamp aside from the HASH256 (SHA256 x2) hash of its serialized transaction data.
Its TXID is the same for legacy, but for for SegWit, the Witness data are excluded when hashing. Both should be in little-endian order.
There's no timestamp in a coinbase transaction or "POW Data" whatever that means,
Perhaps she's talking about the timestamp in the "block header" and the block header's hash which are related in mining.

-It's part of the Bitcoin protocol which is the only requirement to tell "where the coins came from" is if it's in the first transaction of the block indicating that it's a coinbase input, it's valid as long as it's in a valid block and not breaking any consensus rules.

Read this to see what's in a coinbase transaction: https://learnmeabitcoin.com/technical/mining/coinbase-transaction/#

At least you've read actual good replies from other members already.