Bitcoin Wallet Fees
What are transaction fees?
Transaction fees, also known as mining fees, are the fees that are paid by the user towards the bitcoin miners to ensure the transaction is included into the next block. When bitcoin was still new, mining fees were relatively low and often completely free. Since bitcoin has grown in popularity over the past few years, mining fees have increased as well.
How are transaction fees calculated?
Your mining fee determines the speed of confirmation time for your bitcoin payment in the network. Bitcoin wallet transaction fees estimates are calculated in satoshis per byte. The fee rates for bitcoin transactions have been oscillating and, as a rule of thumb, correlate with the bitcoin market price. Current fee and confirmation time estimates across services can be checked here https://bitcoinfees.21.co/ or here https://core.jochen-hoenicke.de/queue/#24h.
We use the Bitcoin Core’s fee estimates and the backlog of unconfirmed transactions on the network as a baseline. The maximum amount by which the fee can be increased over the baseline is capped at two times. We take the bitcoin fee estimate from bitcoind and keep a record of this. We take this record and then we create our own estimate that averages this fee based on conditions to ensure that all the transactions are being absorbed by the network seamlessly. Bitcoin wallet transaction fees are completely unrelated to the value sent in the transaction – it depends upon how many inputs and outputs the transaction has.
Additional network costs for covering the costs of Unspent Transaction Outputs (UTXO)
Our users are charged an additional network cost on all EUR invoices to cover the cost of an additional Unspent Transaction Output (UTXO). To deliver our transaction services, our invoice bitcoin payment needs to be forwarded using the same amount of bitcoin. The extra charge is used to pay the network fees for another bitcoin transaction which is necessary to be executed. Due the rise of network costs, please understand that we can’t cover these costs additionally. This additional network cost enables our business a consolidation and it is not the same as the wallet transaction fee included with your payment to a bitcoin address and charged to your wallet by the bitcoin network. You can minimize additional costs on bitcoin payments while making larger purchases. Please make sure to pay the exact bitcoin amount requested on our invoice to avoid complication and support. You can ensure not to latepay, overpay or underpay an invoice by scanning the QR code or paying with a standalone bitcoin wallet. Please do not use hosted exchange or account services wallet which might even charge withdrawal fees and are not suitable for time-sensitive invoices like ours.
SegWit was successfully activated and we are finishing the rollout of SegWit support for the Bitwala wallets. Using SegWit will enable users to save up to 50% on the network fees, and the same amount will be saved for the additional utxo costs as described above. We ask you for a little more patience and will notify all our users once our systems are upgraded to be 100% SegWit compatible.