Transaction Fee

Also known as a “miners’ fee”. A small fee voluntarily imposed on some transactions sent across the Bitcoin network. The transaction fee is awarded to the miner that successfully hashes the block containing the relevant transaction. The fee is used as an incentive to add the Bitcoin transaction to a block. This ensures that miners will continue to be rewarded for their efforts. Transactions sent without fees will generally be confirmed, however it may take more time as transactions with fees are prioritized. Transactions with higher fees take priority over those with lower fees or not fees. The fee is expressed as the difference between the sum of all input amounts and the sum of all output amounts. Unlike traditional payment systems, miners do not require fees and most miners allow free transactions. All miners are competing for fees and all transactions are competing for a place on the block. Many transactions are typically processed without a fee. However, where transactions require coins to be drawn from many Bitcoin addresses and therefore have a large data size, a small transaction fee is usually expected.


Malone, J.A (2015). Glossary of Bitcoin Terms and Definitions. United States: Lulu Press, Inc

Also known as gas cost, it is the amount of ether that the miners will charge for the execution of your transaction.


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