Bitcoin Transaction Fees Explained

When transacting bitcoin, there are two types of fees you may encounter: on-chain fees and Lightning Network fees. Each serves a different purpose based on the transaction method, and AmberApp simply passes on these network fees without significant markup. Let's explore each fee type and when you might incur them.

Bitcoin network fees are crucial for the operation and security of the Bitcoin network. They incentivise miners to validate transactions and prevent spam that could congest the blockchain. These fees fluctuate based on demand for block space and are measured in satoshis per virtual byte (sat/vB).

You incur these fees when sending bitcoin directly on the blockchain. Wallets, including AmberApp, provide real-time fee estimates to help you select a fee based on your desired transaction speed.

What are my on-chain transaction speed options? At AmberApp, we monitor network activity to provide users with live fee estimates. Here are your options when creating an on-chain bitcoin send:

You may also choose your preferred default confirmation speed for future transactions in your Bitcoin Wallet settings.

Lightning fees, or routing fees, are small charges incurred when processing transactions through the Lightning Network. These fees are minimal compared to on-chain fees and are automatically included in your payments made via AmberApp. For more information on the Lightning Network and its benefits for fast and cost-effective transactions, click here.