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So are fees a percentage (.05bc a transaction) or a Flat fee (.05bc a transaction)?

• Klathmon 9y ago
  Fees are set as a "flat rate" per transaction, but normally expressed as a fraction of "price over size" So if a fee is 150 "sat/byte" or satoshi's per byte. A satoshi is 0.00000001 of a bitcoin. So if your transaction is 250 bytes (which is average for a single transaction to a single person), then you will pay (250 * 150) satoshis (37500 sat), which is about $5. If your transaction is larger, you'll pay more, if it's smaller, you'll pay less. But they are "ranked" in terms of who is picked first by "sat/byte" since the amount of room in the block is only 1MB. So a 500 byte transaction with 37500 sats in fees is worth less than a 250 byte transaction with 37500 sats in fees, because the 500 byte transaction takes up more room that other higher paying transactions could fit in.
  • retromario 9y ago
    Thanks for the explanation. Why do transactions vary so much in relative size?
    • vel0city 9y ago
      A transaction can have many inputs and many outputs. These are all Bitcoin addresses. Sally and Bob each have 1 Bitcoin. Sally received her bitcoin to a single address. If Sally wants to send that 1 Bitcoin to Charlie, that transaction would have 1 input (the address she received it on) and one output (the address Charlie wants to receive it to). Bob has 1 Bitcoin total, but his 1 Bitcoin came from 4 x 0.25 transactions. Bob didn't want to reuse addresses, so for him to send 1 Bitcoin to Charlie he has a transaction with 4 inputs (each address which contains 0.25 BTC) and 1 output. Thus, Bob's transaction is much bigger than Alice's, despite the same amount of Bitcoin being sent.
      • retromario 9y ago
        Thanks, that makes a lot of sense now.