Address formats signal the script type: 1… legacy P2PKH, 3… P2SH (often nested SegWit), bc1q… native SegWit v0, bc1p… Taproot. Newer types generally cost less to spend because witness data is discounted.
Spending consumes whole outputs, so wallets usually create two outputs: the payment and change back to yourself. Change is not a fee and not a loss, it is your own money returning to a new address you control.
Fees are bid per virtual byte, not per amount. When blocks are full, low bids wait. Most wallets let you replace a stuck transaction (RBF) or bump it via the receiver spending it with a higher fee (CPFP).
Explain more simply
To receive, you share an address. It is safe to share: an address can receive, never spend.
Wallets hand out a fresh address per payment. Reusing one still works, but it links your payments together for anyone reading the public ledger.
To send, you enter an address, an amount and a fee. Check the first and last characters of the address on the device that will sign, then send a small test amount first with anything unfamiliar.
Real-world analogy
Paying is like handing over a whole banknote: you receive change back. The fee is postage, it depends on the size of the envelope, not the amount inside.
Key facts
- Addresses receive; they can never spend.
- A fresh address per payment protects privacy.
- Change returns to an address you control.
- Fees depend on transaction size, not amount.
Common misconception
“The change output means part of my bitcoin was lost or taken.”
Change goes back to your own wallet at a new address. Only the explicit fee leaves your control, and your wallet shows it before you sign.[3]
Go deeper
Virtual size weights witness bytes at 25%, so input count and script type dominate the fee, not the value transferred. Consolidating many small inputs during a quiet mempool lowers future costs.
Coin selection is a privacy decision as much as a cost one: combining inputs from separate sources in one transaction publicly asserts common ownership.
Zero confirmations means broadcast and accepted into mempools, not settled. Reorg risk falls sharply with each confirmation; six is a convention, not a protocol rule.
Quick check
Answer every question correctly (100%) to complete this lesson.
1.What mainly determines a transaction fee?
2.Why do wallets generate a new receive address for each payment?
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Extra exam questions
Every question here counts towards your accuracy, XP and rank. No guessing: every answer is explained.
Quick check
Answer every question correctly (100%) to complete this lesson.
1.What mainly determines a Bitcoin transaction fee?
2.Why do wallets generate a new receive address for each payment?
3.What is a 'change output' in a Bitcoin transaction?
4.Does a change output mean part of your bitcoin was lost?
5.What should you check carefully before signing a send transaction?
6.What information does a Bitcoin address itself reveal about its owner?
7.What does 'virtual size' (vbytes) measure in a transaction?
8.Why might sending a small amount from many tiny UTXOs cost a higher fee than expected?
Counts towards your streak in this browser.
Sources
- Bitcoin developer documentation, bitcoin.org / Bitcoin Optech glossary
- Bitcoin Improvement Proposals, bitcoin/bips repository
How proposed rule changes are written, discussed and specified. A BIP is not an adopted rule.
- mempool.space REST API, mempool.space (open source)
Live block, mempool, fee, mining and Lightning figures shown on this site come from this API.