# How Does Bitcoin Mining Fee Exactly Work?

Feb 12 · 3 min read

Miners lay an important role in providing network service security. A large network hash rate makes the network secure and invulnerable to hackers by processing the data in the block into hash output/signature.

Miners need incentives as they put a lot of efforts in the form of time and resources to solve complex mathematical problems which results in higher electricity consumption and hardware costs. ASIC mining hardware ensures Bitcoin security through proof of work. Miners get their incentives in the form of Bitcoin’s block rewards plus transaction fees where block rewards hold a major portion in miner’s earnings which started at 50 bitcoins per block but now it’s decreasing as the time is passing.

# Transaction Fee and Rewards

Nowadays, miners earning is greatly shrinking as the reward on bitcoin is becoming negligible while the transaction fee is showcasing an increased percentage in miners earning. The transaction fee is the fee paid by users for every single transaction they do on the network.

As transaction fee is now playing a dominant role in miners’ earning so in order to widen their profits the miners tend to fish out the transactions with high transaction fee while those with low transaction fee join the pool of unconfirmed transactions.

# Transactions in Waiting

Transactions which are sent with sufficient fees are picked up by miners within the 20 sec while other unchosen transactions keep waiting in the mempool for hours until they get confirmed. These unconfirmed transactions are known as Stuck transactions.

Users may take help of a bitcoin mining Fee Tool in order to determine the right fee amount while sending the transaction.

# Fee Collection

The miner or mining pool that adds the transaction in the block collects the transaction fee

For example, a block is carrying the Transaction fee of 0.0252555 BTC and the Block reward of 28 BTC, then the miner’s earning for this block would be calculated as:

Transaction fee + Block reward = 0.0252555 + 28 = 28.02555 BTC

The above example is clearly showing high block reward and very low transaction fee, but the fall of block reward would enforce an increment in the transaction fee.

So, this is how bitcoin mining fee actually works. In short, we can say that Mining fee is required to defend the network, otherwise, the network could be abused and would be accessible to 51% attacks.

Mining fee also showcases the user’s zeal to pay to use Bitcoin. If someone is willing to pay \$8 to send one Bitcoin transaction, it is clear that Bitcoin is supplying beneficial service.

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## Pieta (PITC)

#### Pieta is the key to an ecosystem era. For more information: https://pieta.network

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