Bitcoin Fee Clarified

Dear All,

Previously i was not aware that the UTXO must be equal to output. So if i did not specify, does it mean the balance went to gas fee?? omg
Example i have UTXO 1btc, if i specified 0.6 btc as my output, does it mean 0.4btc automatically become fee?

Does sending more to different parties increase the fee?

Thank you


Hi @Felicia :slight_smile:

I’m not entirely sure if the 0.4btc is then sent to the miners - good question!

The fee of a transaction is calculated per the size of the transaction in bites - not satoshis…
meaning that if you are sending more BTC it doesn’t necessarily mean a higher fee.

However if you were using a lot of different UTXOs as the input to your transaction, and you’re sending to multiple outputs, this will increase the transaction fee. (As the size of the tx will be greater than a simple 1 UTXO - 1 Output)

Hope this helps a bit :slight_smile: (I’m going to keep notifications on this thread as I’m intrigued about where unspecified remaining outputs end up!)

Happy Friday!

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@jackswango can you shed some more light ? :slight_smile:

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Hi @Felicia - in my understanding it would be difficult to “un-specify” yourself as the output for the remaining 0.4btc unless you had built your own exchange. The BTC algorithm knows that the full UTXO is not intended to be spent and so creates an output for the send in order to receive their change. That is my understanding anyway, hopefully someone will correct me if I’m wrong!

The more inputs and outputs involved in a transaction the higher the fee will likely be. Sending 10 btc with a single input and a single output could have a lower fee than a transaction of 0.01 btc which has multiple inputs and outputs as the size of the transaction in terms of data is larger. :slight_smile:

Hi @Felicia @itsellageee ,

You don’t have to have an exact UTXO to send a transaction. Let me use your example to explain it. If you have a UTXO with 1btc and you needed to send 0.6 btc you will be making a transaction with 1 input and 2 outputs. Since you can’t simply leave 0.4btc and send 0.6btc, you must put that 1btc UTXO as the input. The first output will be 0.6btc, which is going to be the address you originally wanted to send to. The second output will be 0.39 (0.01 fees for the miners) back to an address that you own. This will all be done by the wallet automatically.

To answer your question, no. The balance will be send back to you, to a new address that the wallet just created. (Generate random private key, get public key, get pubic address <-- Send the remaining funds back here)

Yes, increasing the amount of either inputs or outputs in the transaction will increase your total fee. Let’s say the current average fee is 2 satoshi per byte. If you have 1 input and 2 outputs your transaction would be lower in size compared to a transaction with 1 input and 10 outputs. And since we pay satoshi based on the amount of bytes taken, it is natural that larger transaction would have to pay more. That’s why we use the unit of measurement “satoshi per byte”.

The wallet is the one that creates the transaction. If you use a malicious wallet, the bitcoin network will accept the transaction nevertheless. As long as it is valid. In the bitcoin network there is only valid and invalid transactions. But yes, your understanding is correct. :smiley:


Thanks @Mauro :smiley:


No problem. Thanks for helping out other members. I appreciate it. :smiley: