Fee rate

Block space is sold by the byte. A transaction spending one native SegWit coin and creating two outputs measures about 141 virtual bytes, so 10 sat/vB costs 1,410 satoshis whether the payment is 50 dollars or 50,000. Picking the rate is the one part of the cost you genuinely control.

How it works

Size in bitcoin is measured in weight units, and virtual bytes are weight divided by four. SegWit, active since block 481,824 in August 2017, counts signature data at one weight unit per byte while everything else counts as four, which is why a modern spend is cheaper than an old-style one carrying the same information. Round the division up and you have the vsize your wallet multiplies by the rate.

The component sizes are stable enough to do in your head. A native SegWit input costs about 68 vbytes and a Taproot key-path input about 57.5, while a legacy input costs 148. Outputs run 31 vbytes for native SegWit, 34 for legacy, and 43 for Taproot. Add roughly 10.5 vbytes of overhead per transaction and you can price any spend before your wallet does.

Miners fill a candidate block by descending rate until the 4,000,000 weight unit budget runs out, treating chains of unconfirmed transactions as packages so that a well paying child can lift a poorly paying parent. Nothing about the total fee, the age of the transaction, or the amount being moved enters that decision.

Estimating the right rate is a separate problem from calculating the cost. Bitcoin Core's estimatesmartfee looks at how long recent transactions actually took to confirm and returns a rate for a target between 1 and 1,008 blocks. Mempool dashboards work forward instead, projecting the next few blocks from what is currently waiting. Both are guesses about other people's behavior, which is why every wallet lets you overrule them.

Why this matters when you buy bitcoin

Your address type is a permanent decision about future fee rates. Coins withdrawn to an address starting with bc1q cost about 68 vbytes each to spend later; the same coins sitting at an address starting with 1 cost 148. That is more than twice the bill for every future transaction, forever, and it is decided by which address you paste into the withdrawal box. Brokers that deliver straight to your own wallet, such as Coinmama and Itez, take whatever address you give them, so give them a modern one.

Timing is the other lever, and it matters most for small buyers. A 100 dollar purchase withdrawn at 3 sat/vB carries a fee under half a percent of the amount; the same withdrawal at 120 sat/vB during a rush can cost a fifth of what you bought. Recurring buys through platforms that support threshold withdrawals let you skip expensive weeks entirely, and doing nothing is always an option, because coins on an exchange can wait for a cheaper day.

Fee rates also decide whether tidying up is worth it. Sweeping several small coins together is priced entirely by how many inputs you spend, so the difference between doing it at 2 sat/vB and at 60 sat/vB is thirtyfold on identical work. Watch the rate, not the calendar.

Pricing the same payment three ways

Take one payment, one input, and two outputs, and price it at 20 sat/vB across three address types.

A legacy spend from a 1... address measures 226 vbytes, so the fee is 4,520 satoshis. The same payment from a native SegWit bc1q... address measures 141 vbytes and costs 2,820. From a Taproot bc1p... address it measures about 154 vbytes and costs 3,080.

The Taproot result surprises people who were told it is cheaper. Its input is the smallest of the three at 57.5 vbytes, but its outputs are the largest at 43 bytes each, so a spend with one input and two outputs lands slightly above native SegWit. Reverse the shape, spending ten inputs into one output, and Taproot wins comfortably: about 629 vbytes against 722 for native SegWit, a saving of roughly 1,860 satoshis at the same rate. The honest summary is that Taproot pays off when you spend many coins or use multisig, and is roughly a wash for simple payments.

Fee rate vs minimum relay fee

The minimum relay fee is the floor below which nodes will not keep your transaction at all, a default Bitcoin Core lowered from 1 sat/vB to 0.1 in version 30.0; a fee rate is what you choose above that floor. Clearing the floor guarantees only that peers accept and store your transaction, never that anyone mines it. In a quiet market the difference barely shows, because the top of the queue really is 1 or 2 sat/vB. In a rush the floor becomes irrelevant: your transaction is accepted, relayed, and then ignored for as long as the bidding lasts.