Transaction Fee

1.concept

A transaction fee is the network cost attached to a payment or other blockchain action. It is separate from the amount sent to the recipient and from any service fee an exchange charges. On Bitcoin and Bitcoin Cash, the miner can collect the difference between a transaction’s input and output amounts.

2.measurement

Fee units differ by chain. UTXO networks commonly price transactions by size, such as satoshis per byte or virtual byte, while EVM networks use gas for computation and storage.

3.management

Users can manage fees by waiting for lower congestion, batching payments, consolidating UTXOs when fees are low, using fee estimation tools, or applying RBF/CPFP where supported.

Why does a small payment sometimes have a large fee?

On Bitcoin and Bitcoin Cash, the fee usually depends on transaction size and demand for blockspace, not the amount transferred. Spending many small UTXOs can require more inputs than spending one large output. A wallet can therefore quote more for a small payment assembled from many inputs.

For a normal BTC or BCH transaction, the network fee is the total input value minus the total output value. For example, an input of 100,000 satoshis, a payment output of 60,000, and a change output of 39,500 leave a fee of 500 satoshis. Change returns to the wallet; it is not part of the fee. See the Bitcoin transaction guide for the input/output model.

The fee rate divides that fee by transaction size. Read how congestion affects confirmation for the queueing mechanism, or explore it with simulated transactions in Blockspace Lab.