We believe that most Bitcoin users spend way too much on transaction fees. The situation is not nearly as bad as before the implementation of Segwit, a quantum leap in the history of Bitcoin. Still, if you look up average transaction fees, live from the mempool, you will at any given time notice weird transactions with insanely high fees, for no benefit at all to the sender or receiver. (Bitcoin miners, however, are probably happy there are people who still set transaction fees at a ridiculous level.)
One nice “plot the mempool”/fee caluclator page is this (but there are many more).
We decided to run a little experiment, so we created a single-use native Segwit P2WPSH (Bech32) address:
Since we by now consider that address “burned”, meaning we will never use it again, we might as well share its private key (and strongly discourage all end everyone from using it!):
Side-note: Remember where you heard about privkey burning first – it is a subject will return to soon.
We fired up Electrum, our favorite wallet, and toolbox for blockchain experiments, and began looking around for nodes that would allow us to broadcast signed transactions with unusually low transaction fees (Tools/Network/Server and uncheck “Select server automatically”). By randomly choosing between different servers, it took us only a few minutes to find one that is accepted low fees (remember to have the console tab open, or you will miss this information).
Said and done, we headed over to the Send tab (Tools/Preferences/Edit fees manually) and sent 0.001 BTC from 3BTCLeakpiTWc1A78mSsxh8WJn7yRhQon3 – this page’s verified address. Using the dial, the smallest transaction fee offered was around 35 say/byte, and we figured we could go much lower than that. We were able to go down to a mere 165 satoshi, and so we broadcast the transition
The transaction immediately showed up the mempool but didn’t seem like it was picked up by the miners of the following block. As we had ticked the RBF (“replace by fee”) box we could, while waiting for the first transaction to propagate through the network, fire up a second wallet (again, Electrum is fantastic to work with), import the private key above, sign and broadcast a transaction for the coins back home. This time, we are able to go all they way down to 111 satoshi:
Everything was thus set up, and all we could do was wait. How long would it take – if ever accepted by the network?
Much to our surprise, both transactions were included a block, in other words – verified and confirmed – within 24 hours.
We accomplished more than we hoped for. Two transactions cost us 276 satoshi in total. (Much less than in those pointless dust addresses.)
This is great news for all serious Bitcoin users, who like to keep transaction fees at a bare minimum, and maybe not great news for miners, should most users start doing what we have demonstratet is possible.
Note especially that Segwit is the key here. It is not possible to achieve any of this using legacy addresses. Never again will we pay $50 for single transactions (around New Year’s 2018, see feature image). Segwith FTW!
What trick do you use to lower transaction fees? Comments are open!
One more thing!
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