BTC - Fee Estimate
Bitcoin (BTC) is a UTXO-based chain, where the Fee estimate for a transaction fee comes from two main parameters:
- Approximate fee per kilobyte
- Transaction size
BTC Fee Estimate Formula
Estimated Fee == "approximate fee per kilobyte
" x "transaction size
"
Calculating the approximate fee per kilobyte
To estimate the fee for a BTC transaction, you can use the Tatum endpoint for BTC "fee estimate"
curl --location 'https://api.tatum.io/v3/blockchain/fee/BTC' \
--header 'x-api-key: {API_KEY}' \
--data ''
//response:
{
"fast": 13.5, // Satoshis per byte == 0.0135 satoshis per kilobyte.
"medium": 5,
"slow": 4,
"block": 813488, //last used to calculate fee from
"time": "2023-10-23T12:14:42.817Z" // last time when calculation was executed
}
More information at the following link.
There's also the option to make a cURL RPC node request:
curl --location 'https://api.tatum.io/v3/blockchain/node/BTC/' \
--header 'Content-Type: application/json' \
--header 'x-api-key: {API_KEY}' \
--data '{
"jsonrpc":"1.0",
"id":"curltext",
"method":"estimatesmartfee",
"params":[2] // specifies the target confirmation time in blocks.
//response:
{
"result": {
"feerate": 0.00001, // Satoshis per Kilobyte
"blocks": 2
},
"error": null,
"id": "curltext"
}
Calculating the Transaction Size
Transaction Size (in bytes) = (Number of Inputs x 148) + (Number of Outputs x 34) + 10
- Number of Inputs: The number of transaction inputs (unspent transaction outputs or UTXOs) that your transaction is spending.
- Number of Outputs: The number of transaction outputs, including the recipient's address and any change addresses.
- 10 bytes: A fixed overhead for the transaction header.
Let's break it down:
- Number of Inputs x 148 bytes: Each input typically takes 148 bytes. This includes the previous transaction's reference (36 bytes) plus a scriptSig (typically 110 bytes) for unlocking the UTXO and some additional bytes for metadata.
- Number of Outputs x 34 bytes: Each output typically takes 34 bytes. This includes 8 bytes for the amount in satoshis, 1 byte for the OP_RETURN code (if used), and 25 bytes for the recipient's public key or address.
Example BTC transaction
- Number of Inputs = 2
- Number of Outputs = 2
Using the formula:
- Transaction Size (in bytes) = (2 x 148) + (2 x 34) + 10
- Transaction Size (in bytes) = 296 + 68 + 10
- Transaction Size (in bytes) = 374 bytes
So, the transaction size in this example is 374 bytes.
Updated 7 days ago