How Do Transaction Fees Influence the Ordering of Transactions in a Block?

Miners typically order transactions within a block based on the fee rate, or the fee paid per unit of transaction size (e.g. satoshis per virtual byte). This practice ensures the miner maximizes their profit from the limited block space.

Transactions with a higher fee rate are generally prioritized and included before those with a lower rate. This competitive process creates a fee market where users must bid for block space to ensure timely confirmation.

A transaction's fee rate is the key factor determining its position in the queue for confirmation.