Next Bitcoin Core Version to Include 'Smarter' Transaction Fees

Gavin Andresen outlined the new floating transaction fees for bitcoin in a new Bitcoin Foundation blog post.

AccessTimeIconJul 7, 2014 at 9:55 p.m. UTC
Updated Dec 12, 2022 at 12:47 p.m. UTC
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Bitcoin Foundation Chief Scientist Gavin Andresen has outlined the details of new floating transaction fees to be included in the code of the next Bitcoin Core release.

In a new post on the official Bitcoin Foundation blog, Andresen stated that the updated code will enable “smarter” fees that account for the length of time it takes to confirm transactions on the bitcoin network. Ultimately, the new code will determine transaction priority, making sure that transactions confirm more efficiently.

Andresen cited needless complexities within bitcoin’s transaction fee code as the reason for the update. These complications result in inconsistent and time-consuming confirmation periods.

He wrote:

“Instead of using hard-coded rules for what fees to pay, the [new] code observes how long transactions are taking to confirm and then uses that data to estimate the right fee to pay so the transaction confirms quickly – or decides that the transaction has a high enough priority to be sent for free but still confirm quickly.”

Furthermore, the new code enables transaction senders to configure how much priority they want their transaction to receive. In some cases, users may opt to have as many as six blocks pass before the first confirmation is received.

Systemic fee problems addressed

Currently, the Bitcoin Core code can lead to headaches for those who send large bitcoin transactions. As Andresen explained, the new code eliminates some of the hurdles that slowed down transactions in excess of 1,000 bytes in size.

Transactions sent for free also run into problems under the existing framework. The code that determines priority for free transactions automatically places them at a disadvantage in the network. This results in a significant increase in confirmation times.

Andresen wrote:

“The current situation is even worse for free, high-priority transactions: the hard-coded ‘high-priority’ constant is much too low, so transactions sent for free can take a very long time to confirm.”

By making changes to Bitcoin Core, Andresen said, users can rely on more effective transaction fee determinations within the bitcoin network.

Future updates possible

Andresen went on to dismiss the idea of small, fixed transaction fees, citing the behavior of miners – and their preference for high-fee transactions – as reasons to avoid such an approach. Notably, he said there was no desire within the bitcoin development community to institute fixed fees.

Fees should rise in the future as miners sign and confirm larger transaction volumes in the months and years ahead, he wrote:

“I expect to see transaction fees rise until a good solution for optimizing the propagation of blocks across the network is deployed, because I expect transaction volume to increase and I don’t think miners will include more transactions in their blocks until somebody fixes the 'bigger blocks take longer to broadcast' problem.”

Ultimately, he concluded, developers need to tackle this problem and develop new code that enables a more efficient and healthy transaction process.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.