A new service, CoinTape, is offering bitcoin users an answer to the common question: what is the optimum transaction fee?
Using network data from the past three hours, the service lets users compare the current waiting times associated with various fee tiers, calculated in satoshis per byte.
It claims to predict delays with 90% confidence.
The default fee used by many bitcoin wallets is 10 satoshis (0.0000001) per byte. However, according to CoinTape, paying 20 satoshis (0.0000002 BTC) per byte will get you the fastest and cheapest transaction on the network.
For the average-sized bitcoin transaction, 645 bytes, this equates to a fee of 129 bits (0.000129 BTC) (note that this is calculated on a transaction’s size, not its dollar value).
The most popular fee ratio CoinTape lists, 41–50 satoshis per byte, used in more than 30,000 transactions today alone, is double this.
As the number of bitcoin transactions rise, competition for space in each block is heating up. Miners prioritise transactions with the highest fees, working down the list until the block reaches its limit, 750,000 bytes.
Transactions that don’t make the cut remain in the miner’s ‘memory pool’, a kind of bitcoin limbo. They may be included in future blocks depending on their priority or fee.
Currently, you can opt out of the fee altogether. However, there has been debate as to whether this should be raised, with a recent pull request to make a 10,000 satoshi minimum to reduce spam on the network.
CoinTape indicates that avoiding a fee is more likely to result in delays to your payment. It could take up to six blocks, or around one hour (blocks are created roughly every 10 minutes).