低成本Bitcoin錢包SegWit轉移大作戰 Send Bitcoin with Low Fees (EN/CN)

English Version

Recently, I am consolidating my Bitcoin accounts and researched a bit on fees. I was told by a friend in a community group he had the same bad experience on a very expensive transaction fees of up to US$8. It was not even at a price this high of US$6000.

Goal

I need to transfer all my Bitcoin from several wallets to some new wallets because I want to claim my Bitcoin Gold. The 2nd reason is to migrate all my existing wallets to Ledger Wallet that has implemented proper SegWit supports. (Not B2X-SegWit2X)

Bitcoin Gold

To claim Bitcoin Gold, I have to provide my private keys of existing Bitcoin wallets to a different wallet. It has been advised best to empty my existing BTC wallet first. After talking to the developer of the Bitcoin Gold, I am told I am safe to move my BTC now. That’s why I am taking actions.

Ledger Nano S

I believe many of you reading this story has recently received the Ledger Nano S from your back orders. I originally planned to do an open box review, but gave up because I found several reviews that have been properly written. Instead, I am going to write some useful tips.

Ledger Nano S is good on its combination of hardware with software. The hardware is well designed, while the software is easy to use. The only thing at the moment I want to advise everyone is to test your Recovery Seed several times before actually transferring your coins in. I tested a few times for successful recovery, as well as intentionally enter the seed wrong to see what would happens – found that entering the seed wrong will not get through, good to know, right?

Why switching to SegWit?

The benefit of SegWit is to lower the transaction fees. The non-SegWit Bitcoin transactions are usually around 226 bytes. SegWit transactions have its size about 40% smaller in virtual bytes than non-SegWit transactions. As fees are calculated in virtual bytes, this means the fee should be lowered by 40%.

Note: non-SegWit addresses start with 1, SegWit address start with 3.

Idiot-proof low fees transaction

I lose faith on some wallets due to their unreasonably high fees. Now I only use Electrum and Mycelium - they let me set fees manually. I tested today with Electrum and it suggested a fee for the transaction at 0.00019122 BTC, seems good, right?

This fee is not a per byte fee, this is the fee that will complete the transactions. Convert this fee at today’s Bitcoin Price of $5900, it is $1.12, quite affordable.

Calculate your fee

Why calculate? Isn’t $1.12 a lot cheaper than $8? After some research, I realized there could be a better rate.

There are a few websites that do fee estimations, and I think this one is the 1st one we can use.

https://bitcoinfees.21.co

I did 3 things in this website.

1st, change the unit from Sat to BTC. Satoshis PER BYTE -> BTC PER BYTE. This should make life easier, as most of us see our Bitcoin in BTC.

2nd, look for the value next to the first green bar. Take a look at the time delay shown at the right.

3rd, take a look at the text right below the chart:

Which fee should I use?

The fastest and cheapest transaction fee is currently 0.0000009 BTC/byte, shown in green at the top.
For the median transaction size of 226 bytes, this results in a fee of 0.0002034 BTC.

This means you take the fee per byte and multiply it by 226. This means you need 0.0002034 BTC to complete a transaction.

As you can see, this is more expensive than the one suggested by Electrum. Well, here, the main point is fastest. The assumption is you pay this fee to let the transaction be processed within the delay, which is 2 blocks shown in the chart, that is 20 minutes. I do not need to get the transaction be confirmed immediately, so I can set a lower fee to save a bit. Even if I set a lower fee, the wallet that will receive the Bitcoin will inform me immediately after I broadcast the transactions.

I want a cheaper fee

Is it a must to pay 0.0002034 BTC to have a fast confirmation? Not really. If the network is less busy, a lower fee should get through quite fast.

But be sure to set a fee that is good enough to get the transaction be processed. Setting unrealistic fee will make your transaction never get processed. Desktop version of Electrum is good in this sense because you can add additional transaction fee after the broadcast.

WARNING: Try with a very small amount! Better with Electrum with Replaceable By Fee turned On. Do not send large amount of Bitcoin if you are not sure what you are doing. If you have a lot of Bitcoin, you should just use the suggested fee in Electrum because you are wealthy enough!

To save more fees, take a look at this website:
https://btc.com/stats/unconfirmed-tx

Then, you should see something like this:

Current best transaction fees
40 Satoshis/byte | 0.0004 BTC/KB

We need the 1st number, not the 2nd number. The reason is explained in the 1st website.

So, how much is Satoshi in Bitcoin?

1 Satoshi = 0.00000001 BTC
The eighth number after the decimal places.

40 Satoshis/byte = 0.00000040 BTC, 55% cheaper than the previous website! In the previous website, it lists 0.0000009 BTC/byte, which is 0.00000090, 90 Satoshis. Using 40 Satoshis to calculate the fee, 0.00000040 x 226 = 0.00009040 BTC!! 53% cheaper than the idiot proof Electrum fee. It is around $0.53336 in USD!

Cheaper Price, How Long?

I have multiple wallets and therefore cheaper fees let me save more. Well, it is always good to test it with a very small transaction. I tested with 0.0001 BTC, using this 0.00009040 BTC fee. The result is surprising.

In less than 10 minutes, my transaction has been processed. How wonderful... paying a fee for economic class and enjoy the first class experience!

Fee that is too low

Fee too low at this moment is about 30 Satoshis per byte. It would results in transaction delay and no one is going to process your transaction. You cannot cancel it as well. It will cause you inconvenient, but will probably not causing lost coin. You could solve this issue by the followings.

Electrum - Fee too low (my 2nd transaction @.@) Replaceable / Increase Fee

First, if you are using Electrum and have turned on Replaceable By Fee, you can pay more fee after you send the transactions.

Another method is to use Transaction Accelerator. There are two providers. BTC.com's service is expensive that I don't think you will use it. The one from ViaBTC is basically free, but have limitation. Check this out:
https://pool.viabtc.com/tools/txaccelerator

If your transaction have not been processed in 2 weeks, your coin will probably reappear in your wallet. Search Transaction Reappearance for details.

You can also try CPFP Child Pays For Parent. You will need to search for it because I thinkn it is too complicated for this story.

In fact, 40 Satoshis in my example here is already a very good deal, not worth saving tiny additional that could cause troubles.

Key Take Away

2 main points you need to know for savings:

1. Make sure you use a wallet that can let you adjust fee manually, better with Replaceable By Fee feature.
2. When you are able to adjust the fee, using the 2 websites I used above can help you safely send your transactions in lower fee.

At the time I finished writing this story, the recommended fee raised from 40 Sat to 105 Sat. It is good to wait for a bit to let the fee gets lower. I also learnt that it is cheaper to send in weekend. Use these tips to consolidate your BTC before B2X activation!~