For an ordinary Bitcoin transaction, the fee is the total input value minus the total output value. It is not a separately signed payment to a fixed miner address. A miner can collect it when including the transaction in a valid block. Transaction accounting.
Fee and fee rate are different
A fee is an amount, measured in satoshis. A fee rate relates that amount to the space a transaction uses. Wallets commonly express it as satoshis per virtual byte, or sat/vB.
SegWit defines transaction weight and virtual size; virtual size is weight divided by four and rounded up. This gives a shared unit for comparing transactions with different witness structures. BIP 141’s size definitions.
These illustrative examples use assumed sizes and rates, not live estimates:
| Virtual size | Fee rate | Total fee |
|---|---|---|
| 140 vB | 8 sat/vB | 1,120 sats |
| 280 vB | 4 sat/vB | 1,120 sats |
| 280 vB | 8 sat/vB | 2,240 sats |
Two transactions can pay the same total fee while offering different rates. The arithmetic is virtual size × rate.
Why sending more can cost less
Transaction size depends on its structure: inputs, outputs, and the information needed to spend them. The amount transferred is not a simple percentage-based fee schedule. Combining many small outputs can require more transaction data than spending one larger output. Inputs and outputs.
Miners construct candidate blocks and choose which transactions to include. A fee estimate is an estimate of competitive conditions, not a reservation in a future block. Block construction.
What a fee bump changes
Replace-by-fee can replace an unconfirmed transaction under a node’s acceptance policy. Bitcoin Core’s version-pinned documentation describes conditions involving conflicts and fees; it is not a rule that every wallet implements the same interface. Replacement does not edit an already-confirmed block. Core v29.0 replacement policy.
Read confirmations and reorganizations for the distinction between a transaction being broadcast and being recorded in the chain.