Bitcoin blockchain makes it feasible for people to transfer value in units known as bitcoins. Bitcoin blockchains have made transactions safer for people, however, at the time of this writing, users are facing average bitcoin transaction costs of more than $15.
The value of the transfer is made through transactions recorded on the bitcoin blockchain public ledger. The procedure of making and recording the transfer of value with public ledger block leads to transaction fees.
When miners mine new blocks, they receive a block reward. Block reward is the amount of Bitcoin made from mining a block of the currency and all transaction fees for the transactions in the block they mine.
Payment of network fees to miners assists in incentives miners to process transactions on the network. If miners don’t receive payments for the number I resources they spend, they may not function in the long term due to the increasingly high costs of mining.
Many miners process transactions to make a profit. If miners don’t receive payments, they have little or no reason to mine bitcoin.
What happened to Bitcoin after all 21 million coins are mined
With the right proportion of miner fees, you can guarantee that your transactions will be confirmed over a short period. However, the fees paid for your transactions are too low, your transaction could take a long time to confirm.
How does Bitcoin Blocksize affect the transaction fee?
If you are new to Bitcoin, the notion of a public ledger may seem confusing. However, it is quite easy. Blockchain is essentially a list of records also known as blocks, linked together using cryptography. Each block comprises verified details of the transaction, including a timestamp, transaction data, and a cryptographic hash of the previous block.
The bigger the size of a block on the blockchain, the higher the transaction fees and block rewards tend to, be. It takes longer to reach a consensus on larger size blocks because it becomes difficult for a miner to mine larger blocks.
When bitcoin was launched, its initial block size was 1MB per block, presently the bitcoin lock size has. A soft limit of 2MB, and a hard limit of 4MB, however, it is rare for any block to exceed the lower value and the current average block size is 1.31MB.
Increasing the bitcoin size does not guarantee a reduction of the transaction fee, even though the block size has increased and transaction fees haven’t rocketed to formerly seen levels, block isn’t full either, with some extra capacity.