If you are new to building on the Bitcoin network or diving into raw transaction construction, one core concept you must master is how transaction fees are paid. Unlike some account-based chains with fixed gas costs, Bitcoin uses a UTXO model where you explicitly calculate and set your fee rate.
How the Math Works
Bitcoin transaction fees are not based on the amount of money you send. Instead, they are calculated based on the physical data size of your transaction measured in virtual bytes (vbytes).
Total Fee=Fee Rate (sat/vB)×Transaction Size (vBytes)
\text{Total Fee} = \text{Fee Rate (sat/vB)} \times \text{Transaction Size (vBytes)}
