There are ways to send Bitcoin and pay very low fees if you know the right tricks.
Let’s break it down so you can save money next time you make a Bitcoin transactions.
What Are Bitcoin Fees?
First, let’s understand what Bitcoin fees are. When you send Bitcoin, your transaction has to be approved by people called “miners.” These miners use computers to verify and add your transaction to the blockchain. In return for their work, they get paid a fee. The faster you want your transaction to go through, the higher the fee you might have to pay.
But don’t worry—if you’re not in a rush, you can pay lower fees and still get the job done. Here are 4 tips you need to know:
Tip 1: Wait for Low Traffic Times
Bitcoin transactions don’t always cost the same amount. When a lot of people are sending Bitcoin at once, fees go up. But when fewer people are using the network, the fees go down. It’s kind of like how traffic gets lighter late at night.
If you can, try sending your Bitcoin when the network is less busy. You can check websites that show how crowded the Bitcoin network is at any given time. By timing your transaction, you can “beat the rush” and pay less in fees.
#Bitcoin network fees are back down to 10 sat/vB. Time to clean up shop and do some UTXO management. pic.twitter.com/Az2Deag3xj
— Wicked (@w_s_bitcoin) June 17, 2024
In this example, you can see the term UTXO. UTXO stands for “Unspent Transaction Output” and it’s an important part of how Bitcoin transactions work. When you send Bitcoin, it’s like using cash—you don’t send a specific part of a Bitcoin, but rather a full amount, just like how you give a whole dollar bill, and you get change back.
UTXOs are the “leftover” amounts of Bitcoin after a transaction. Each Bitcoin transaction uses previous UTXOs as inputs and creates new UTXOs as outputs. Here are more details:
Let’s break down UTXOs, because understanding them is key to really grasping how Bitcoin works.
BTC is essentially a collection of the smallest units called satoshis. For example, 1 BTC equals 100 million satoshis, and 0.35 BTC equals 35 million satoshis. So, Bitcoin exists as a… pic.twitter.com/CVVe1uyMRd
— imper1um (@imper1um85) October 23, 2024
Tip 2: Use Layer 2 Solutions
Another way to save on fees is by using something called a “Layer 2 solution.” One of the most popular Layer 2 solutions for Bitcoin is the Lightning Network. The Lightning Network lets you send Bitcoin instantly and with super low fees. Think of it like taking a shortcut to avoid a traffic jam.
With the Lightning Network, you can make lots of small transactions without having to pay high fees each time. It’s a great option if you’re sending Bitcoin often or don’t want to wait.
Just in: We’ve already processed more #Bitcoin orders through #LightningNetwork this year than in 2023! ⚡️
L2 adoption is going strong! 💪 pic.twitter.com/vryNkMhYip
— CoinGate (@CoinGatecom) October 21, 2024
Tip 3: Adjust Your Transaction Fee
Many Bitcoin wallets let you choose how much of a fee you want to pay. If you’re not in a hurry, you can set a lower fee. Your transaction might take a little longer, but it will save you some cash. It’s kind of like going for the slow lane on the highway, but knowing you’ll still get to your destination. Here is a video about it:
Tip 4: Use SegWit Wallets
SegWit (short for Segregated Witness) is a technology that makes Bitcoin transactions smaller in size. Smaller transactions mean lower fees! If you use a SegWit-enabled wallet, you’ll automatically pay less for sending Bitcoin. It’s like packing a smaller suitcase so you don’t have to pay extra for baggage. Here is a video about it:
Conclusion
Paying low fees when sending Bitcoin doesn’t have to be a headache. By timing your transaction, using the Lightning Network, or choosing a lower fee, you can send Bitcoin without breaking the bank.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
