How do I calculate Bitcoin transaction fee?

The BTC Fee Estimate Formula is a mathematical tool used to determine the approximate cost of a Bitcoin transaction. This formula takes into account the size of the transaction and calculates the fee based on the current market rate for transaction fees.

Now, let's apply this to the fee estimation. Assuming the approximate fee per kilobyte is 13500 Satoshis, we can calculate the estimated fee by multiplying this rate by the transaction size in kilobytes. Since our transaction size is 370 bytes, we convert it to kilobytes (0.37KB) and multiply by 13500 Satoshis/KB. Thus, the estimated fee is 13500 Satoshis/KB x 0.37KB = 4995 Satoshis.

The formula is straightforward: the estimated fee equals the "approximate fee per kilobyte" multiplied by the "transaction size." This allows users to predict the cost of their transactions before sending them, ensuring they have enough funds to cover the fee.

To calculate the transaction size, a formula is used that considers the number of inputs and outputs in the transaction. Specifically, the transaction size is calculated by multiplying the number of inputs by 148 bytes, adding the number of outputs multiplied by 34 bytes, and then adding an additional 10 bytes.

For example, let's assume the transaction has 2 inputs and 3 outputs. Using the formula, the transaction size would be (2 x 148) + (3 x 34) + 10 = 370 bytes.