How network fees are calculated

On Guarda, we do not charge any additional fees for sending funds between addresses on the blockchain. What fees do you pay for performing transactions? 

You pay to include your transaction in the blockchain. Each block stores information about transactions (date, hash, recipient address, etc.) and a hash of the previous block. But one block has a limited size, which means that a block can include a limited number of transactions. Miners confirm your transaction using their computing power and receive a reward for each block and fee that you pay.

The network fee depends on the size of the transaction. The larger the transaction size, the higher the network fee, which may encourage miners to include it in the block first, but smaller transactions require less computation.

On the Bitcoin network, you pay for each byte of the transaction in Satoshi (0.00000001 BTC). Guarda allows you to select the amount of Satoshi per byte. The larger the amount, the faster your transaction will be included in the block. Guarda calculates the recommended amount according to the last blocks so that you do not overpay. If you set a minimum fee, your transaction may be stuck in the memory pool for a long time, where it will wait for confirmation. If after 48 hours no one includes this transaction in the block, it will be canceled and the funds will be returned back to your wallet.

On the Ethereum network, fees are calculated using the formula Gas Fee = Gas Price x Gas Limit, where the unit of payment of the fee is GAS.

You set the price of gas yourself, it is calculated in GWEI (1 GWEI = 0.000000001 ETH)

GAS LIMIT is the maximum amount you are willing to pay for a transaction. A simple transaction on the Ethereum network costs 21,000 GAS.

Why is the network fee too high?

Often during large-scale events, network activity increases, and a huge number of transactions are awaiting confirmation. Miners prefer to validate transactions with higher fees and the average network commission amount increases.

Transaction size is measured in kilobytes and can be large if it has a large number of inputs. For example, if your wallet has a lot of small incoming deposits and the transfer amount is collected from these small deposits, the fees will be large.

High fees on the Bitcoin network

Bitcoin is the most popular crypto currency to date. You may have noticed that during market fluctuations, user activity increases significantly. A large number of transactions are awaiting confirmation in the memory pool, of which the miners prefer to include transactions with higher fees (Satoshi per byte). Their actions increase the average fee amount for the last few blocks, which is automatically calculated by Guarda and displayed in the 'Send' tab. 

Still have questions? Email us at [email protected].

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