How Can a User Estimate the Optimal Fee for Their Transaction?
A user can estimate the optimal fee by observing the current state of the mempool and the fee rates of recently confirmed transactions. Various fee estimation tools and wallet software analyze the data of unconfirmed transactions and the fee rates of the last few blocks.
These tools provide a recommended fee rate (e.g. sat/vbyte) to achieve confirmation within a desired time frame (e.g. next block, within six blocks). The optimal fee is the lowest amount that is competitive enough to be included by a profit-maximizing miner in a timely manner.
Glossar
Fee Estimation Tools
Calibration ⎊ Fee estimation tools within cryptocurrency and derivatives markets function as algorithmic models designed to predict transaction costs, incorporating network congestion, gas prices in blockchain systems, and exchange fee structures.
Optimal Fee
Calibration ⎊ Optimal fee structures within cryptocurrency derivatives necessitate precise calibration to market microstructure, acknowledging the inherent volatility and informational asymmetries present.
Unconfirmed Transactions
Transaction ⎊ The designation "Unconfirmed Transactions" primarily arises within blockchain networks, notably Bitcoin and Ethereum, representing pending transactions awaiting inclusion in a subsequent block.