Introduction

Bitcoin transactions are commonplace, but not everyone is aware of how fees work and the importance of wallet addresses. In this article, we will explore how they work in Bitcoin transactions, why they can be volatile, how to change wallet addresses to optimize costs, especially in critical periods like the one around the Bitcoin halving.

Transaction Fees: What are they and how do they work?

Transaction fees in the Bitcoin network are essential to incentivize miners to process and confirm transactions. These commissions are variable and depend on various factors such as:

• Transaction Size: The more data included in a transaction, the higher the fee.

• Network Conditions: During periods of heavy traffic, fees may increase as more users compete to have their transactions processed quickly.

Why Are Commissions Volatile?

Fees are mainly influenced by the demand for Bitcoin block space. Since each block of the blockchain can contain a maximum of 1 Megabyte (MB) of data and a new block is created and confirmed approximately every 10 minutes, available space becomes extremely precious. As a result, participants are often motivated to increase fees to ensure faster confirmation of their transactions.

High Traffic Moments

Usually, fees increase when a large number of users transact simultaneously, causing an increase in the volume of transactions to be processed. This often occurs during sudden spikes in the price of Bitcoin, times when numerous investors decide to buy or sell. Additionally, relevant market events, such as the approval of Bitcoin spot ETFs, can spur intense trading activity and contribute to increased fees.

 

Bitcoin fees chart from January 2022 to now.

Alternative Blockchains

When Bitcoin fees are particularly high, it may be worth considering using alternative blockchains such as Binance Smart Chain or Polygon, which offer lower transaction costs and fast confirmation times. This is particularly useful for lower value transactions or for transactions that require high frequency.

How to set up a wallet on our platform 

To start saving on fees and optimize your transactions, you can set up a Bitcoin wallet that relies on an alternative chains (like BEP20) wallets on our platform.
Here is a step-by-step guide:

1. Copy the Bitcoin Wallet Address: (In the case of Binance Wallet) After logging in to Binance, select "Bitcoin", then "Deposit", here select the address on BNB Smart Chain network (BEP20), copy the address.
2. Reach the platform: On www.bitviking.com login.

3. Set up your wallet: On your dashboard, click "Open a support ticket" and paste your wallet into the text box.

4. Send the ticket: After filling in all the fields and checking the wallet, click on "Send". 

5. Proceed to withdrawal: Proceed with withdrawal with lower fees.

Key Points

• Understand commissions: They are crucial to transactions and vary based on several factors.

• Avoid Fees Spikes: Use other blockchains during periods of high congestion.

• Wallet Optimization: Set up and manage your wallet to reduce expenses.

Conclusions

Transaction fees and wallet address management are fundamental aspects for those who use cryptocurrencies such as Bitcoin. Understanding when and how to save on fees can make a difference in your long-term investment. With the guidance provided, you will be able to optimize your transaction strategies and effectively manage your wallet on our platform.

This article aims to be a useful resource for navigating the world of cryptocurrencies with greater confidence and knowledge.