Why is the Transaction Fee Ratio So High for Small Transfers in Electrum?

[jedlee]

Hi everyone, I’m encountering an issue while using the Electrum wallet (version 4.6.1) for a small BTC transfer.

I tried to send 0.00002122 BTC, but the wallet shows that I need to pay about 55.18% as the transaction fee. I have a few specific questions:

Is this 55.18% fee calculated as a percentage of the transaction amount I’m sending, or as a percentage of my total wallet balance?

If I were to send a larger amount, say 2 BTC, would I still need to pay a 55.18% fee? That would mean almost 1 BTC in fees, which doesn’t seem reasonable.

How exactly does Electrum determine the transaction fee? My understanding is that fees are based on transaction size (in bytes) and the sat/vByte rate, but why does the percentage become so high for small-value transactions?

I’d really appreciate any clarification or advice from the community on this issue, especially on how to avoid paying disproportionately high fees for small BTC transfers. Thanks!

[hosemary]

The fee you pay for a bitcoin transaction doesn't depend on the amount you send.
The fee depends on transaction (virtual) size, how congested the network is and how fast you want your transaction to be confirmed.

As you were trying to send a very small amount of bitcoin, the ratio of fee to the sending amount was big and electrum warned you about that.

[jedlee]

Does the calculation of this transaction fee follow any consistent pattern or general rule? Could you perhaps illustrate it with a concrete example?

[hosemary]

Does the calculation of this transaction fee follow any consistent pattern or general rule? Could you perhaps illustrate it with a concrete example?

The fee you pay for a transaction equals the virtual size of the transaction (in vbytes) multiplied by the fee rate (in sat/vbyte).

The virtual size of the transaction depends on the number of inputs and outputs. The more inputs/outputs you add to the transaction, the more fee you have to pay for it.
The transaction virtual size also depends on the input/output types. For example, a legacy input adds more to the transaction virtual size than a segwit input.

The fee rate is set by yourself.
You should set the fee rate depending on how congested the network is and how fast you want you transaction to be confirmed. The faster you want your transaction to be confirmed, the higher fee rate you should use for that.

[rat03gopoh]

How exactly does Electrum determine the transaction fee?

Electrum typically uses server-recommended fees (mempool data). However, you can use mempool.space to find the live fee recommendation and then adjust it to your sending settings in Electrum.

but why does the percentage become so high for small-value transactions?

That's the nature of dust transactions, the byte is large compared to the value. Electrum isn't "evil".
The question for you, are you:
- using legacy addresses (starting with 1)?
- consolidating many UTXOs?

[NeuroticFish]

Does the calculation of this transaction fee follow any consistent pattern or general rule? Could you perhaps illustrate it with a concrete example?

The tx fee is proportional to tx size. And tx size is determined by the number of inputs and outputs.
For a normal tx sent to one recipient plus your change address (so 2 recipients) what matter the most is the number of inputs.
Let's say it's more expensive to spend a bag full of cents than spending an 100$ bill.

In Electrum you can do View->Show Coins and then in the coins tab you can see your (currently unspent) inputs and the addresses they are residing in.

[nc50lc]

Does the calculation of this transaction fee follow any consistent pattern or general rule? Could you perhaps illustrate it with a concrete example?

Here's one transaction sample, this will display if you click "preview" after selecting the fee rate (minus the edits):

• The "2.1 sat/vbyte" on the left is the fee rate that I picked in the previous window's slider.
• The "141 vbytes" on the right is the transaction's computed virtual size based from the number of listed Inputs and Outputs regardless of each's values in BTC.
  More inputs in the list will result with significantly higher size while more outputs will slightly increase it. (different address types also result with different sizes)
• So, since the "fee rate" is in "satoshi per virtual bytes", you'll multiply it with the transaction's "virtual bytes" to get the absolute fee.
  That's 2.1 x 141 = 296.1sat or 300sat (0.000003BTC) rounded-up.

Now, check the transaction details in your transaction history by double-clicking the dates.

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