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I understand transactions are given priority based on the fee per vbyte of transaction data included in the transaction.

When I look at a Fee Calculator I see different quotes based on the desired block confirmation time. For example, to get confirmation within two blocks the fee is calculated as 72 satoshis/byte or $34.31 for 10 inputs and 2 outputs ($3.40 per input). For confirmation within 144 blocks (24 hrs) the rate drops to 6 satoshis/vbyte which turns out to $1.86 for 10 inputs and two outputs (or 0.18 cents per input).

The assumption that a transaction will be included for 6 satoshis/vbyte is based on speculation that the block size will not continue to be clogged with other transactions that pay a higher fee per vbyte over the course of the next 24 hrs. If the rate of incoming transaction continues to remain the same the transaction should never get confirmed.

Why is it assumed that the number of transaction will decline to the extent that the fee of 6 satoshis/vbyte will be adequate to outdo other transactions? How do they know how many transactions will hit the blockchain in the next 24 hrs and more importantly what sort of fee will be attached to those transactions?

Thanks

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All fee calculators rely on statistical modelling of the mempool. There is no assumption that future transaction producer behavior is identical to what was observed in the past, but it's the best data available to produce an estimate with.

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  • Thanks. Do you know how the statistical model is developed? I mean exactly what formula is used to calculated the expected cost per vbyte over the next n blocks?
    – S.O.S
    Jan 28 at 0:07
  • Every fee estimator has their own. I'm not familiar with the exact details of any. Jan 28 at 0:14

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