![]() This can occur if you broadcast a transaction with a perfectly reasonable fee for the current market conditions, but before the next block is mined, many other higher fee transactions get broadcast by other users, which essentially push your transaction to the back of miners’ priority queue. If a fee estimate algorithm fails to correctly predict the future state of the fee market then transactions can get stuck. Miners confirming some extremely low fee rate transactions because higher fees are being paid out-of-band are also ignored.These transaction will be ignored if the miner isn’t broadcast them as unconfirmed, which would decrease their strategy’s ROI because they’d be paying other miners the fees as well. Miners may stuff their blocks with high fee rate transactions that cost them nothing to create, since they are paying themselves.If some users are unnecessarily paying exorbitant fees, they will be ignored.This methodology prevents the fee estimates from being skewed by several potential problems: This is because for any number Z >= Y the transaction was successfully mined within Z blocks. Then it calculates how many blocks (Y) it took each transaction to be mined and tracks an array of counters in each bucket for how long it to took transactions to get confirmed and increments all the counters from Y up to the highest bucket. When a new block arrives, it counts the number of transactions in each bucket and the total amount of fee rate paid in each bucket. More specifically, when a transaction enters the mempool, it makes note of the current block height. The average fee rate of transactions in this bucket will give you an indication of the lowest fee rate you can pay while still having a sufficiently high chance of being confirmed within your desired 5 blocks. Then you would look at the next highest fee rate bucket, and so on, stopping at the last bucket to pass the test. ![]() For example, if you wanted to know what fee rate you should put on a transaction to be included in a block within the next 5 blocks, you would start by looking at the bucket with the highest fee rate transactions and verifying that a sufficiently high percentage of them were confirmed within 5 blocks. It operates under the assumption that transactions paying higher fee rates will be included in blocks before transactions with lower fee rates. Core’s logic can be found here.Īt a high level the algorithm works by grouping transactions into fee rate buckets and then tracking how long it takes transactions in the various buckets to be mined. Bitcoin Core’s Fee EstimationĪt BitGo, we use Bitcoin Core’s fee estimation algorithm to extract baseline data for our own fee estimation algorithm. BitGo implemented dynamic fees in July 2015 and now, two years later, we are still working on improving our fee estimate algorithms. ![]() I covered the history of Bitcoin transaction fees and how it led to the current state of our fee market in this CoinDesk article. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |