Fee Rate

When miners select transactions for inclusion in a block, they don't just look at the raw fee amount, they evaluate transactions based on their fee rate.

This is how we calculate the fee rate:

$\mathbf{Fee\ Rate = \frac{Transaction\ Fee}{Transaction\ Size}}$

Miners use the fee rate to maximize their profit by comparing the profitability of including different transactions in their blocks.

For example, consider these two transactions:

Transaction A: 50,000 sats fee, 250 vbytes size
Transaction B: 30,000 sats fee, 100 vbytes size

Fee Rates:

Transaction A: 200 sats/vbyte (50,000 ÷ 250)
Transaction B: 300 sats/vbyte (30,000 ÷ 100)

Fee Rate Priority

Even though Transaction A pays a higher absolute fee, Transaction B is more profitable for miners because it provides more fees per unit of block space.

Fee Rate Units

There are three common ways to measure fee rates:

sats/vbyte (Most Common)
sats/wu (Internal)
sats/byte (Legacy)

Unit	Description	Usage	Example
`sats/vbyte`	Virtual bytes account for witness discount	Most common unit used by wallets and block explorers	50 sats/vbyte
`sats/wu`	Weight units used internally by Bitcoin Core	Internal Bitcoin Core (4M WU block limit)	12.5 sats/wu
`sats/byte`	Deprecated since SegWit activation	Legacy software only	50 sats/byte

Understanding Virtual Bytes (vBytes)

Virtual bytes (vBytes) are a way to express transaction size that accounts for the SegWit discount. The formula is simple:

$\mathbf{Virtual\ Bytes = Transaction\ Weight ÷ 4}$

Transaction Type	Weight Units	Virtual Bytes
Legacy (non-SegWit)	size × 4	Same as raw size
Native SegWit	(base × 4) + witness	~25% smaller than raw size

Example Calculation

Consider a SegWit transaction with:

Base size: 200 bytes
Witness size: 100 bytes

Minimum Relay Fee Rate

Nodes enforce a minimum fee rate to prevent spam:

Default minimum: 1 sat/vbyte
Transactions below this rate are typically rejected
You can check your node's setting:

bash

$ bitcoin-cli getmempoolinfo
{
  "loaded": true,
  "size": 47293,
  "bytes": 32883821,
  "usage": 148075552,
  "maxmempool": 300000000,
  "mempoolminfee": 0.00001000,  # 1 sat/vbyte
  ...
}

NOTE

💡 The minimum relay fee is a policy rule, not a consensus rule. While theoretically possible, getting a below-minimum fee transaction mined is extremely unlikely unless you have a direct connection to a miner.

RPC: Current Fee Rates

You can estimate current fee rates using Bitcoin Core:

bash

$ bitcoin-cli estimatesmartfee 6
{
  "feerate": 0.00008124,  # BTC/kB
  "blocks": 6
}

Or query popular block explorers:

mempool.space
blockstream.info
bitcoinfees.earn.com

Remember that fee rates are dynamic and can change rapidly based on network demand.

Suggest Edits

Previous: Transaction Weight
Next: RBF

Fee Rate

When miners select transactions for inclusion in a block, they don't just look at the raw fee amount, they evaluate transactions based on their fee rate.

This is how we calculate the fee rate:

$\mathbf{Fee\ Rate = \frac{Transaction\ Fee}{Transaction\ Size}}$

Miners use the fee rate to maximize their profit by comparing the profitability of including different transactions in their blocks.

For example, consider these two transactions:

Transaction A: 50,000 sats fee, 250 vbytes size
Transaction B: 30,000 sats fee, 100 vbytes size

Fee Rates:

Transaction A: 200 sats/vbyte (50,000 ÷ 250)
Transaction B: 300 sats/vbyte (30,000 ÷ 100)

Fee Rate Priority

Even though Transaction A pays a higher absolute fee, Transaction B is more profitable for miners because it provides more fees per unit of block space.

Fee Rate Units

There are three common ways to measure fee rates:

sats/vbyte (Most Common)
sats/wu (Internal)
sats/byte (Legacy)

Unit	Description	Usage	Example
`sats/vbyte`	Virtual bytes account for witness discount	Most common unit used by wallets and block explorers	50 sats/vbyte
`sats/wu`	Weight units used internally by Bitcoin Core	Internal Bitcoin Core (4M WU block limit)	12.5 sats/wu
`sats/byte`	Deprecated since SegWit activation	Legacy software only	50 sats/byte

Understanding Virtual Bytes (vBytes)

Virtual bytes (vBytes) are a way to express transaction size that accounts for the SegWit discount. The formula is simple:

$\mathbf{Virtual\ Bytes = Transaction\ Weight ÷ 4}$

Transaction Type	Weight Units	Virtual Bytes
Legacy (non-SegWit)	size × 4	Same as raw size
Native SegWit	(base × 4) + witness	~25% smaller than raw size

Example Calculation

Consider a SegWit transaction with:

Base size: 200 bytes
Witness size: 100 bytes

Minimum Relay Fee Rate

Nodes enforce a minimum fee rate to prevent spam:

Default minimum: 1 sat/vbyte
Transactions below this rate are typically rejected
You can check your node's setting:

bash

$ bitcoin-cli getmempoolinfo
{
  "loaded": true,
  "size": 47293,
  "bytes": 32883821,
  "usage": 148075552,
  "maxmempool": 300000000,
  "mempoolminfee": 0.00001000,  # 1 sat/vbyte
  ...
}

NOTE

RPC: Current Fee Rates

You can estimate current fee rates using Bitcoin Core:

bash

$ bitcoin-cli estimatesmartfee 6
{
  "feerate": 0.00008124,  # BTC/kB
  "blocks": 6
}

Or query popular block explorers:

mempool.space
blockstream.info
bitcoinfees.earn.com

Remember that fee rates are dynamic and can change rapidly based on network demand.

Suggest Edits

Previous: Transaction Weight
Next: RBF