Bitcoin Transaction Fees: sat/vB and How Fees Are Calculated

How Bitcoin transaction fees are calculated: size in vbytes times the fee rate in sat/vB, and why inputs and address types matter more than the amount sent.

How are Bitcoin transaction fees calculated?

Bitcoin has no gas. Every transaction spends earlier coins (inputs) and creates new ones (outputs), and whatever the inputs hold beyond the outputs goes to the miner as the fee. Because block space is limited, miners compare transactions by the fee they pay per unit of size, so the whole calculation fits on one line:

Fee (sats) = virtual size (vB) × fee rate (sat/vB)

A satoshi, or sat, is 0.00000001 BTC. A typical one-input, two-output payment from a native SegWit wallet is 141 vB. At a hypothetical 18 sat/vB it pays 141 × 18 = 2,538 sats, or 0.00002538 BTC, which is about $1.90 if BTC is a hypothetical $75,000.

If you also use Ethereum, note the contrast. Ethereum charges for computation in gas priced in gwei, as explained in how Ethereum gas fees work and what gwei is. Bitcoin charges for bytes.

What is a virtual byte (vB)?

SegWit, defined in BIP 141, changed how size is counted. A transaction’s weight is its base size (everything except signatures and other witness data) times 3, plus its total size. Virtual size is that weight divided by 4, rounded up to the next whole number.

The effect is simple to use: each non-witness byte counts as 1 vB and each witness byte counts as a quarter of one. Signatures live in the witness, so SegWit and Taproot spends are cheaper than legacy ones of the same shape. A block can hold 4,000,000 weight units, the equivalent of 1,000,000 vB.

What makes a transaction bigger?

The number of inputs and outputs, and the address types involved. These are typical sizes for single-signature spends, based on Bitcoin Optech’s size tables; real signatures can differ by a byte or so.

Two patterns stand out. Inputs are the expensive part, because each carries a reference to the coin being spent plus a signature. And newer formats are cheaper to spend from: Taproot has the smallest inputs, while native SegWit has the smallest outputs, which is why it edges out Taproot for a simple one-input payment.

At the same 18 sat/vB, the legacy payment costs 4,068 sats and the native SegWit one 2,538 sats, about 38% less for exactly the same payment.

A quick formula for your own transaction

Add the fixed overhead, then each input and output from the table, and round up. For native SegWit that is 10.5 + 68 × inputs + 31 × outputs; for Taproot it is 10.5 + 57.5 × inputs + 43 × outputs.

Example: A payment with three inputs and two outputs is 10.5 + 172.5 + 86 = 269 vB with Taproot, or 4,842 sats (about $3.63) at 18 sat/vB. The native SegWit version is 277 vB, or 4,986 sats. With two outputs, native SegWit is smaller for one or two inputs, and Taproot is smaller from three inputs on.

Worked example: why many small deposits cost more to spend

Suppose your wallet holds twelve small coins from regular purchases, and you now send one payment that needs all of them. With native SegWit, the size is 10.5 + 12 × 68 + 2 × 31 = 888.5, which rounds up to 889 vB. At 18 sat/vB that is 16,002 sats, about $12.00, or 6.3 times the fee for the same payment made from a single coin.

Timing can soften this. If you combine those twelve coins into one during a quiet period at 2 sat/vB, the consolidation is 858 vB and costs 1,716 sats, about $1.29. The later payment then costs the single-coin 2,538 sats, for a total of 4,254 sats, which is 11,748 sats (about $8.81) less than spending all twelve coins at 18 sat/vB. The trade-off is privacy: a transaction with many inputs publicly suggests that one person controls them all.

Very small coins can become uneconomic. At a busy 45 sat/vB, spending one native SegWit input costs 68 × 45 = 3,060 sats, about $2.30, so any coin worth less than that costs more to move than it is worth at that rate.

How do you choose a fee rate?

A fee rate is a bid for limited space, and rates rise and fall with demand. Miners decide what they include, and they generally favor higher rates when blocks are in demand. Here is how the same 141 vB payment looks at three hypothetical rates:

To pick a rate, check a mempool explorer, which shows what recent blocks accepted and estimates for faster and slower confirmation, and compare it with your wallet’s suggestion. At the low end, Bitcoin Core 29.1, released in September 2025, lowered its default minimum relay fee rate to 0.1 sat/vB, though its release notes caution that such low-fee transactions are not guaranteed to propagate or confirm. If a payment waits too long, replace-by-fee and other speed-ups let you raise the rate.

Network fee vs exchange withdrawal fee

When you withdraw bitcoin from an exchange, the fee on the screen is set by the exchange, not calculated from your transaction’s vbytes. It may be a flat amount that is higher or lower than the network cost at that moment, and the difference is explained in withdrawal fees vs network fees. To weigh a withdrawal fee alongside trading fees and spreads, run the numbers through the calculator below or follow a fair method for comparing crypto fees.

Checklist before you send bitcoin

• Check current fee rates on a mempool explorer and compare them with your wallet’s estimate.
• Look at how many coins your wallet will spend; coin control shows which inputs it picked.
• Decide how urgent the payment is, and enable replace-by-fee if you choose a low rate.
• Avoid creating tiny outputs that will cost more to spend later than they are worth.
• Confirm the fee in sats as well as dollars, since the dollar figure depends on a price that moves.

The bottom line

A Bitcoin fee is virtual size times fee rate, so the number of inputs and the address type drive the cost, not the amount you send. Estimate the size, check live fee rates before sending, and keep an eye on small coins that could cost more to spend than they are worth.

This content is for education only and is not financial, investment, tax or legal advice. Crypto assets are volatile and you can lose money. Examples use hypothetical numbers. See our disclaimer and editorial policy.