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I know probably everyone give an extra transaction fee, but are there minimum transaction fee that one must pay, and is it based on the number of input transaction (UTXO)?
And I have read that wallet developers tries to eliminate small UTXOs when preparing a new transaction. So is there harm for having too many small/dust UTXOs?
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are there minimum transaction fees?
No, you could also pay no fee but your transaction will probably not be included in a block then. This is a pretty old example-transaction with no fee paid: https://blockchain.info/de/tx/8131ffb0a2c945ecaf9b9063e59558784f9c3a74741ce6ae2a18d0571dac15bb
and is it based on the number of input transaction
Not on the number but on the size in Bytes.
So is there harm for having too many small/dust UTXOs?
Yes. You can see it at the moment. People pay around 1.80$ for a "one address to one address"-transaction. More inputs/outputs means a bigger size. Bigger size means higher fees.
Can you elaborate why "Bigger size means higher fees"? Is it because the block size is fixed, so bigger size transaction means the miner can fill in less transaction in a block, thus it needs more fee to be included? – Helin Wang – 2018-02-09T21:10:16.793
Yes. the maximum is fixed. A miner mines a block which has a limit of around 1 Mb. So if the miner includes a big transaction into a block, he can maybe not include 4 smaller ones with better fees. If you pay 2 dollars for a 1000 bytes transaction but 4 other people with 250 byte transactions pay 1 dollar per transaction, the miner can choose between getting 2 dollars from you for 1000 bytes or getting 4 dollars for the other 4 transactions (also with 1000 bytes in total). – ndsvw – 2018-02-09T22:02:41.453
The miner fee is .001 BTC/KB. Median transaction sizes are around 226b. – bitsabhi – 2018-02-09T21:04:35.670
@bitsabhi thanks! is the max number of txn a miner can put in a block limited by the block size, or limited by a pre-defined max txn number? – Helin Wang – 2018-02-09T21:17:16.517
Block Size. Since the block size is hardcoded to 1mb, and let's assume all the transactions are of 226b. So the total possible transactions would be around 4.5k. But usually that's not the case as after a block is mined, no more transactions can be added. I have seen 1000-1500 txns in some blocks. – bitsabhi – 2018-02-09T21:31:07.840
@bitsabhi that seems an inefficiency of the mining program, seems like the block will no longer change after the hashing has started, shouldn't it be more efficient that the block can be updated during hashing. And because hashing is by definition random, modifying the block does not reduce the chancing of mining a block. What does it harm? – Helin Wang – 2018-02-09T21:47:29.783
@bitsabhi Oh do you mean a block is found before it could be filled? – Helin Wang – 2018-02-09T21:48:14.670