Bitcoin Mining Lab

Mining Lab · Coinovo Academy · Fees

Fees

You pay for space

Building 9 min 6 cards 6 questions

Objectives

Not by amount

A transfer of 10 euros costs just as much as one of 10,000, as long as both need the same space in the block. You pay for bytes, not for value, unlike a bank transfer abroad.

Why space is scarce

A block has a limited size. If not all waiting payments fit in, the price per byte decides who goes first. It is an auction for space, not a fee schedule.

sat/vB

The rate is given in satoshi per virtual byte. Your fee is that rate times the size of your transaction.

Fee = rate x size. The amount does not appear in it.

What makes a transaction large

Not the amount, but the number of inputs. Whoever has received many small amounts has to combine many of them, and every input costs space. A common payment comes to around 225 virtual bytes.

The waiting room

Whatever has no block yet waits in the mempool. Miners take from there what brings in the most per byte. A higher rate means going sooner. With an empty mempool the minimum rate is enough.

When it gets expensive

With a full mempool the rates rise. For small amounts the fee can then make up a noticeable share: on 20 euros sent with an 8 euro fee that would be forty percent.

Glossary

sat/vB
Satoshi per virtual byte; the fee rate.
Mempool
Waiting room for payments not yet confirmed.
Input
An amount received earlier that is now being spent.

Further reading

This module comes with 6 explained questions. They live in the app, along with your progress and the credit for finishing.
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More modules

What Bitcoin isMoney without a middlemanHow mining worksGuessing until it fitsHashrateHow much guessing goes onThe difficultyWhy the rhythm holdsThe halvingThe reward shrinksWallets and keysWhat you never hand overMining poolsTogether instead of aloneSpotting fraudThe same tricks every timeTokenomics, taken apartThis app, as the worked exampleRunning mining as a businessWhat a machine really costsSelf-custody in practiceFrom the first key to inheritanceTax and bookkeepingWhat the tax office wants to seeHow the network really worksNodes, mempool, forksRisk and position sizeHow not to lose everything