Transfer Fee

Unlike the fee for bank transfers, the fee in the blockchain does not depend on the transfer amount. The fee is the payment for the network activity as it processes your transaction. It is determined by the user at the transaction creation step.

For example, to transfer BTC, a transaction is formed from available unspent outputs (incoming transactions to the sender’s address) and two outputs:

1) an output for the recipient with the transfer amount,

2) change for the sender.

The transaction fee will equal the difference between the sum of the incoming transactions and the sum of the resulting outputs.

Imagine that Wallet A has two transactions available for the amount of 0.1 BTC and 0.15 BTC. Wallet A wants to send 0.2 BTC to Wallet B. Wallet A creates a transaction using the outputs of 0.1 BTC and 0.15 BTC, with an output of 0.2 BTC for Wallet B, change for itself, and a fee of 0.01 BTC.

	Inputs	Outputs
1	0.1000 BTC	0.2000 BTC
2	0.1500 BTC	0.0490 BTC
Total:	0.2500 BTC	0.2490 BTC
Fee:		0.0100 BTC

The recommended fee will increase linearly with an increase in the number of inputs and outputs, as the network will have to make more changes and save more information.