A brief of what you need to understand about fee rate and Depth

[Mia Chloe]

We all know when you make a bitcoin transaction, you're kind of competing for a limited amount of space in the next block and based on mining incentives we have to pay a fee to get it confirmed and the size of this fee isn't based on the amount of BTC you're sending but on the size and UTXO count of your transaction and how congested the network is. This is where the concepts of transaction weight and mempool depth come into play.


Transaction weight

A transaction's weight is basically just a measure of its size but it's not a simple byte count. The concept of weight was actually introduced with the SegWit upgrade which significantly changed to how transaction data is treated.
A Bitcoin transaction is actually made up of two major parts;

• The core transaction data, which includes the list of inputs and outputs.
• The witness data which contains digital signatures that prove you have the right to spend the bitcoins.

To get more transactions into a block SEGWIT was used to introduce a system that gives the witness data a discount. The total size of a block is limited to 4 million weight units (WU). Legacy transaction data is heavy counting for 4 WU per byte but the witness data is actually lighter counting for around 1 WU per byte. This system incentivizes wallets to use SegWit enabled transactions which actually allows more of them to fit into a block and helping to scale the network. Your final fee is calculated by multiplying your transaction's total weight by your chosen fee rate (sats/vB) and not actually (sat/bytes) most people make that mistake.


Mempool Depth

A transaction doesn't go directly into a block. First it gets broadcast to the network and sits in a waiting area which we know as the mempool. Every full node has its own mempool and they relay unconfirmed transactions to each other. So what miners do is that they look at the transactions in their mempool to decide which ones to include in the next block and because they are motivated by profit they will prioritize the transactions with the highest fee rates not fee.

Now, the depth of the mempool is a measure of this waiting room's congestion. It's not actually a technical property of a single transaction but more like a dynamic state of the entire network. Imagine the mempool as a long queue with different lanes for different fee rates. The highest paying transactions are at the front and the lowest are at the back. Now when we  talk about mempool depth, we are referring to how many transactions are waiting in each of those lanes.

When the network is congested the depth of the mempool kinda increases which actually means you may have to pay a higher fee rate to get to the front of the line. However if the network is less congested and the mempool is shallow a small fee has a very  high chance of getting you a quick confirmation. This is why Bitcoin transaction fees are not fixed.

Congestion also explains why sometimes the depth you see at the time of broadcasting your transaction may not be the depth the transaction will be confirmed at.

[I_Anime]

 

Mempool Depth

A transaction doesn't go directly into a block. First it gets broadcast to the network and sits in a waiting area which we know as the mempool. Every full node has its own mempool and they relay unconfirmed transactions to each other. So what miners do is that they look at the transactions in their mempool to decide which ones to include in the next block and because they are motivated by profit they will prioritize the transactions with the highest fee rates not fee.

Now, the depth of the mempool is a measure of this waiting room's congestion. It's not actually a technical property of a single transaction but more like a dynamic state of the entire network. Imagine the mempool as a long queue with different lanes for different fee rates. The highest paying transactions are at the front and the lowest are at the back. Now when we  talk about mempool depth, we are referring to how many transactions are waiting in each of those lanes.

When the network is congested the depth of the mempool kinda increases which actually means you may have to pay a higher fee rate to get to the front of the line. However if the network is less congested and the mempool is shallow a small fee has a very  high chance of getting you a quick confirmation. This is why Bitcoin transaction fees are not fixed.

Congestion also explains why sometimes the depth you see at the time of broadcasting your transaction may not be the depth the transaction will be confirmed at.

Mempool depth tells us how crowded the waiting room (mempool) is . And that’s where the miners start picking waiting transactions and most time they tend to prioritize transactions with high fees just to make more profit profits especially when the market is congested . Base on my research the more the waiting transactions the higher the congestion which may lead to high fee , that’s why we have Deep mempool and shallow mempool.

Deep mempool- lot of transactions waiting so the market will be quite congested, that’s when one most time need to pay high fee for their transactions to be selected by the miners.

Shallow mempool- one with less waiting transactions, in this case even small fee can get confirmed fast . Because at the market is less congested.

[Churchillvv]

Your final fee is calculated by multiplying your transaction's total weight by your chosen fee rate (sats/vB) and not actually (sat/bytes) most people make that mistake.

Perhaps there is no much difference when people use the term Sat/vbyte and Sat/byte they both in this current day and time refer to same thing except someone is being specific to a transaction initiated before the introduction of Segwit. It’s prior Segwit that Sat/byte was used, but now the introduction of Segwit only added the term virtual (v) but just people use the two terms interchangeably. How the difference is not really much and since transactions this days are mostly Segwit when some say the fee is calculated in sat/bytes it’s left for one to know that they basically mean sat/vbytes just not clearly stated. In reality the calculation always end up with same result which formula is total fee (in satoshis) = Fee rates (whether sat/vbyte or sat/bytes) just that in Segwit TX discount may apply and in Non-Segwit it doesn’t apply discount. I might wrong though, just what I’ve read before and I believe it’s correct

[hd49728]

Bitcoin Transaction Fees - Everything in one.
Transaction fees and fee rates (Learn me a Bitcoin).

Bitcoin transaction fee is from transaction size and fee rate used for it, so these two Bitcoin transaction size calculators can help too.
https://jlopp.github.io/bitcoin-transaction-size-calculator/
https://bitcoinops.org/en/tools/calc-size/

Lastly, this calculator and tool to plot your Bitcoin transaction in Bitcoin mempools is helpful for learning and practicing too.
https://bitcoindata.science/plot-your-transaction-in-mempool

[Zaguru12]

Deep mempool- lot of transactions waiting so the market will be quite congested, that’s when one most time need to pay high fee for their transactions to be selected by the miners.

Shallow mempool- one with less waiting transactions, in this case even small fee can get confirmed fast . Because at the market is less congested.

I perfectly understand what your message is here but it is clear to understand that even in a less congested mempool as you have clearly described I think you still need to pay high priority fee if you’re looking to get your transaction in the next block but this time around this high priority fee wouldn’t be much like during the high congested network.

For example the network is actually less congested now and fees less than 1 sats/vbyte are enough to get my transaction to be picked but if I am looking to get the transaction into the next available block then I have to pay high priority fee like the 1 sats/vbyte or a little bit higher so the miners treat it as high priority transaction. This is how it works even in more congested pool.

Also fast confirmation depends on two things, your transaction been picked in the next block and the block gets confirmed fast by the miner solving the puzzle fast. You can have your transaction picked the next block but the block might get delayed to be confirmed fast

[Ivystar5]

Also fast confirmation depends on two things, your transaction been picked in the next block and the block gets confirmed fast by the miner solving the puzzle fast. You can have your transaction picked the next block but the block might get delayed to be confirmed fast

So does bitcoin transaction accelerator step in at this point to help the transaction get confirmed faster or the accelerator helps it only to get included in the next block? educate me like am 5!

Because at this point I find this discussion very interesting to know, don't want to use some of the links I've got just need someone to explain.

Snip

Not to criticise your idea of providing links but does the op state anywhere the needs of links you provided or you just decided to post them even though it would be helpful to someone like me but to me it seemed like you didn't have anything to say regarding op. Don't get me wrong!

[khaled0111]

So does bitcoin transaction accelerator step in at this point to help the transaction get confirmed faster or the accelerator helps it only to get included in the next block? educate me like am 5!

Bitcoin transaction accelerators (miners or their partners) accelerate your transaction by including it in the block they are working on. There is no guarantee that your transaction will be confirmed in the next block, though, as another miner (who has not included your transaction in their block) might be the one to solve the block first.
So, even if an accelerator chooses to accelerate your transaction, this doesn’t mean it will necrssarily be confirmed in the next block.

Not to criticise your idea of providing links but does the op state anywhere the needs of links you provided

I don’t see anything wrong in sharing more helpful resources as long as they are relevant to the main topic, tbh.

[joniboini]

you just decided to post them even though it would be helpful to someone like me but to me it seemed like you didn't have anything to say regarding op.

Those links are definitely useful. There's nothing wrong with not commenting on the OP post either. Not like we have to do that just to comment on the thread to begin with. Is there a reason why you comment on this?

Speaking of useful links, IIRC mempool.space allows you to check transaction weight easily. CMIIW.

[Porfirii]

you just decided to post them even though it would be helpful to someone like me but to me it seemed like you didn't have anything to say regarding op.

Those links are definitely useful. There's nothing wrong with not commenting on the OP post either. Not like we have to do that just to comment on the thread to begin with. Is there a reason why you comment on this?

-snip-

In his/her defense it must be said that he/she expressed his doubt politely, and not as we are used to seeing when other users think that certain post is off-topic.

But I definitely agree with you: not only was the post on-topic, but also of great value.

[hd49728]

Not to criticise your idea of providing links but does the op state anywhere the needs of links you provided or you just decided to post them even though it would be helpful to someone like me but to me it seemed like you didn't have anything to say regarding op. Don't get me wrong!

Rather than answering you directly, I was late but fortunately some forum members replied and gave you answers which I agree with them.

I don’t see anything wrong in sharing more helpful resources as long as they are relevant to the main topic, tbh.

Thank you.

Those links are definitely useful. There's nothing wrong with not commenting on the OP post either. Not like we have to do that just to comment on the thread to begin with. Is there a reason why you comment on this?

Thank you. One of my shared links is to resource for learning about fee rate on learnmeabitcoin.com website.

In his/her defense it must be said that he/she expressed his doubt politely, and not as we are used to seeing when other users think that certain post is off-topic.

I don't consider his post is impolite but more likely that he wanted to teach me but it seems like he did not learn enough even he made 500 posts and earned about 200 merits.

But I definitely agree with you: not only was the post on-topic, but also of great value.

Thank you.

[cr1776]

....
Mempool Depth

A transaction doesn't go directly into a block. First it gets broadcast to the network and sits in a waiting area which we know as the mempool. Every full node has its own mempool and they relay unconfirmed transactions to each other. So what miners do is that they look at the transactions in their mempool to decide which ones to include in the next block and because they are motivated by profit they will prioritize the transactions with the highest fee rates not fee.

Now, the depth of the mempool is a measure of this waiting room's congestion. It's not actually a technical property of a single transaction but more like a dynamic state of the entire network. Imagine the mempool as a long queue with different lanes for different fee rates. The highest paying transactions are at the front and the lowest are at the back. Now when we  talk about mempool depth, we are referring to how many transactions are waiting in each of those lanes.

When the network is congested the depth of the mempool kinda increases which actually means you may have to pay a higher fee rate to get to the front of the line. However if the network is less congested and the mempool is shallow a small fee has a very  high chance of getting you a quick confirmation. This is why Bitcoin transaction fees are not fixed.

Congestion also explains why sometimes the depth you see at the time of broadcasting your transaction may not be the depth the transaction will be confirmed at.

And it might be useful to note that the mempool on any node can be different than on another node.  Node A might have transactions 1 through 10, node B might have 2 through 11. 

[Ronsbit]

OP, it is nice that you have come up with this article. I am not a tech guru, but at least I have been in the space for a little while now, and what I know most is that the higher the amount one puts as a transaction fee, the faster the confirmation, but sometimes it seems there is no competition on the mining block rewards (please spare my choice of words), as one can set a little transaction fee and it is quickly confirmed. Another thing I have also discovered is that transactions are quickly confirmed at night, within the time from 11:00 PM to 03:00 AM, but not as quickly as it is during the day, and I believe it is likely the reason being that people do more transactions during the day than at night, or are there any other reasons for it?

Lastly, I had an experience with the Trust Wallet app when I tried to transfer some Bitcoin to another wallet, but whenever I tried to do such, I always got an error message as UTXO ERROR, even when I increased the fee, the same response I got, and I did this repeatedly, thinking it was a network error. I checked for a wallet update, and the wallet version is up to date. I had to download another wallet and import the private key into the wallet, and I did my transaction without adding any fees. This made me wonder what really happened because I thought that if I increased the fee, the transaction would scale up, but it did not. Can you explain what really happened there?

[Emjay24]

OP, it is nice that you have come up with this article. I am not a tech guru, but at least I have been in the space for a little while now, and what I know most is that the higher the amount one puts as a transaction fee, the faster the confirmation, but sometimes it seems there is no competition on the mining block rewards (please spare my choice of words), as one can set a little transaction fee and it is quickly confirmed.

This is because at those times the mempool is less congested and the depth of the mempool is very shallow, so the acceptable fee rate goes low since there's not many transactions for miners to be selecting only those with higher fees. They include almost every transaction into their block and get it confirmed, even those with fees lower than acceptable fee rate.

Lastly, I had an experience with the Trust Wallet app when I tried to transfer some Bitcoin to another wallet, but whenever I tried to do such, I always got an error message as UTXO ERROR, even when I increased the fee, the same response I got, and I did this repeatedly, thinking it was a network error. I checked for a wallet update, and the wallet version is up to date. I had to download another wallet and import the private key into the wallet, and I did my transaction without adding any fees. This made me wonder what really happened because I thought that if I increased the fee, the transaction would scale up, but it did not. Can you explain what really happened there?

I would wait with you to get the reply on this because I've never heard of a Bitcoin transaction that got confirmed without fees.

[alegotardo]

Dude, congratulations for your text! Its very well written, but since I am annoying Iwill make some constructive considerations, no problem, right!?

You said the fee is measured in sats/vB and that many peoples confuse it with sat/byte, which are partially true... any modern wallet will use "satoshis per virtual byte", which is the same as the first one divided by 4 because before SegWit, everything was measured in real bytes. So I think it would be just a matter of clarifying that sats/vB already take into account the discount of SegWit .

You also mentioned the "number of transactions" waiting when explain about mempool depth, but in practice when we see that, weare talkinbg about the total vBytes pending, which is much more than the number of transactions, but rather their combined weight... a thousand of small transactions don't have the same effect as a hundred of huge transaction with many inputs.

And finally, just to reinforce that even small fees can quickly enter a block... because miners maximize total revenue per block and there are always be room for small transactions with lower fees that conveniently fit on the block.

And over all that said, I wolud like just add two more things that havent been mentioned yet...

Since you mention congestion network, here's a tip about RBF (Replace By Fee) which practically all wallets has. Its the ability to retransmit your transaction with a higher fee to achieve faster confirmation.

And also to make it clear that the mempool is not unique... each node has its own, so a transaction that are "stuck" at one place due to a low fee may have already been "fitted" in another and just has not a chance to find the next block yet.

[notocactus]

Since you mention congestion network, here's a tip about RBF (Replace By Fee) which practically all wallets has. Its the ability to retransmit your transaction with a higher fee to achieve faster confirmation.

A mandatory condition is you store your bitcoins in a non custodial wallet, and broadcast your transaction from it. Make sure when broadcasting a transaction, in Preview, always check whether RBF is On (not off or disabled).

With non custodial wallets, you can not only be able used Replace-by-Fee (RBF) but also Child-Pay-For-Parents (CPFP).
Bitcoin open source wallets that support replace-by-fee (RBF).
[TUTORIAL]getting a low-fee transaction unstuck by creating a CPFP with Electrum.
[Guide] Use CPFP if your stucked transactions from blockchain.com wallet.

You can turn non-RBF transactions to RBF but it's complicated.
Turn non-RBF transaction to RBF enabled?

[Cookdata]

OP, it is nice that you have come up with this article. I am not a tech guru, but at least I have been in the space for a little while now, and what I know most is that the higher the amount one puts as a transaction fee, the faster the confirmation, but sometimes it seems there is no competition on the mining block rewards (please spare my choice of words), as one can set a little transaction fee and it is quickly confirmed. Another thing I have also discovered is that transactions are quickly confirmed at night, within the time from 11:00 PM to 03:00 AM, but not as quickly as it is during the day, and I believe it is likely the reason being that people do more transactions during the day than at night, or are there any other reasons for it?

Miners prioritized incentives before anything, only few of them mine an empty block in other to get only the block reward but this happen ones or twice in a day and sometimes you hardly see any transaction of such. The more you pay, the quick your transaction get confirmed but it's not a wise thing if you are not in a hurry, just look at the mempool and look at the median fee, you will get the average fee/vbytes to get your transaction confirmed in the next block very quick.

Lastly, I had an experience with the Trust Wallet app when I tried to transfer some Bitcoin to another wallet, but whenever I tried to do such, I always got an error message as UTXO ERROR, even when I increased the fee, the same response I got, and I did this repeatedly, thinking it was a network error. I checked for a wallet update, and the wallet version is up to date. I had to download another wallet and import the private key into the wallet, and I did my transaction without adding any fees. This made me wonder what really happened because I thought that if I increased the fee, the transaction would scale up, but it did not. Can you explain what really happened there?

This is strange, I wouldn't say it's not true but it's not possible because you know why? Trust wallet is an spv wallet and by that, you have to rely on another server to broadcast your transaction, those server will reject any transaction that doesn't comes with a fee. If they accept the transaction without any fee then it will not get included in the next block, in fact the miners will reject the transaction if it's get relay to their nodes.

One of the criteria for your transaction to be accepted by other node is your minrelaytxfee must be greater than 1 but recently, if you look at mempool.space, there are some mining nodes that are accepting transactions less than a sat per vbytes but minrelaytxfee can't be or equal 0, it's not possible. If you are even able to relay a transaction less than 1 sats, you are likely going to wait a little longer before your transaction get confirmed.

[Wiwo]

Deep mempool- lot of transactions waiting so the market will be quite congested, that’s when one most time need to pay high fee for their transactions to be selected by the miners.

Shallow mempool- one with less waiting transactions, in this case even small fee can get confirmed fast . Because at the market is less congested.

I perfectly understand what your message is here but it is clear to understand that even in a less congested mempool as you have clearly described I think you still need to pay high priority fee if you’re looking to get your transaction in the next block but this time around this high priority fee wouldn’t be much like during the high congested network.

For example the network is actually less congested now and fees less than 1 sats/vbyte are enough to get my transaction to be picked but if I am looking to get the transaction into the next available block then I have to pay high priority fee like the 1 sats/vbyte or a little bit higher so the miners treat it as high priority transaction. This is how it works even in more congested pool.

Also fast confirmation depends on two things, your transaction been picked in the next block and the block gets confirmed fast by the miner solving the puzzle fast. You can have your transaction picked the next block but the block might get delayed to be confirmed fast

Priority in fees is for occasions and needs.
Sometimes I use the lowest of fees, and my transactions get confirmed asap, even below the expected time. One thing is for sure when it comes to Bitcoin transactions: the network gives you a lot of options when it comes to transaction confirmation and fees.

image below explains such features that give bitcoin users options and priorities in fees based on network congestion at the time of sending the transaction into the mempool.

[Mia Chloe]

Priority in fees is for occasions and needs.
Sometimes I use the lowest of fees, and my transactions get confirmed asap, even below the expected time. One thing is for sure when it comes to Bitcoin transactions: the network gives you a lot of options when it comes to transaction confirmation and fees.

Please resize your image it's way too large. Anyways I think that's blue wallet but still those fee rates I see in your image is way too high considering the state I've constantly met the mempool at for weeks now. Of course you get a confirmation really fast but you are spending too much in fees.

The best way to broadcast a transaction is to first review the mempool to see how congested it is that way you can pick a nice fee that will still give you a decent confirmation time. Most wallets over emphasize high fees with enormous fee rates. If you use a wallet like Electrum, the better since you can see the depth the transaction would be placed if you broadcasted with that fee.

[Ambatman]

Dude, congratulations for your text! Its very well written, but since I am annoying Iwill make some constructive considerations, no problem, right!?

You said the fee is measured in sats/vB and that many peoples confuse it with sat/byte, which are partially true... any modern wallet will use "satoshis per virtual byte", which is the same as the first one divided by 4 because before SegWit, everything was measured in real bytes. So I think it would be just a matter of clarifying that sats/vB already take into account the discount of SegWit .

This is too simplified and Imo a lil flawed.
The SegWit discount is applied to the transaction's virtual size, not the fee rate itself.
So SegWit transactions are not inherently four times cheaper than pre Segwit.
divided by 4 relates to how virtual size are calculated But this doesn't mean sats/vB is sat per byte divided by 4.

[justinlamode]

I want to get a little clarification, assuming I have received Bitcoin 10 times from ten different wallets and I want to make a transaction from that wallet to another wallet, how will the input be calculated? I notice that when sending out transaction under this condition, the input varies depending on the amount I'm sending and sometimes I get up to 5 inputs which means contribution from 5 of those different transactions that entered my wallet, my concern is knowing how the input is calculate and if there is anything I can do to reduce the number of inputs which will also affect the transaction weight.