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I just received a question about what a txn is and how fees are calculated on Bitcoin, so I want to share a bit of experience.
Actually, when you send Bitcoin, your txn (transaction - transaction) will incur a fee based on two main factors. First is the size of the transaction, measured in virtual bytes (vB). Second is the fee rate you choose to prioritize processing.
The good thing is that you have full control over this. Currently, the minimum fee is 1 sat/vB (satoshi per virtual byte), but if you want your transaction to be confirmed faster, you can increase this number.
But here’s an important point: if your txn has many inputs or outputs (for example, you receive Bitcoin from multiple sources, or send to multiple addresses), the size of the transaction will increase significantly. Larger size = higher fee, even if your sat/vB fee rate remains the same.
Therefore, if you want to save on fees, you should try to optimize the number of inputs/outputs in each transaction. That’s why many people prefer to consolidate (gather) their Bitcoin into a single address when fees are low.