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The first time I heard about Bitcoin, someone told me that it's almost free to transfer bitcoins to other people. However, I found something called "cost per transaction." Why does the Bitcoin network charge per transaction? Who receives the transaction fee?

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    Hi Rizzma, and welcome to Bitcoin.SE! I've edited your post down to one question. I did this because making posts cover fewer topics makes them easier to answer. Your second question was answered here. – Nick ODell Oct 13 '14 at 2:56
  • Also, I attempted to clarify your first question. Feel free to edit your post if I didn't capture your intent correctly. – Nick ODell Oct 13 '14 at 3:00
  • possible duplicate of Who gets BitCoin transaction fees – Nate Eldredge Oct 13 '14 at 3:14
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    Transaction fees go to miners. Typically a minimum fee is mandatory if your coins are -somewhat- new. For example: if you received 1 BTC and decide to send it else where in 23 hours, you will face a minimum fee based on the transaction size represented in bytes. If you were to wait that extra hour, you could send that whole bitcoin transaction free. It typically helps against spamming the network by sending that 1 BTC over and over causing the blockchain to grow for no reason. Hope that somewhat helps – rdadkins Oct 13 '14 at 3:30
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    @fatso113 A good comment - why not post it as an answer? – Nick ODell Oct 13 '14 at 7:13
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Because it is in fact "almost free". The transaction fee charged by the bitcoin protocol is so small that it basically doesn't matter when compared to standard banking fees.

This measure is in place for several reasons, including:

  • Promoting mining. Mining requires expensive hardware and miners expect to receive some sort of compensation for contributing to the network. This is necessary to keep the bitcoin network decentralized, secure, reliable and fast. This is where this fee ends up: in the hands of miners that confirm your transactions.
  • Avoiding spam. Anybody could decide to write a bot that sends very, very small fractions on a very short delay in order to spam the network, as a form of DoS. This fee makes these kinds of attacks very expensive, because if you transfer, let's say 30 euros, the fee could be 0.01 cents. But if you transfer 1 cent, the fee is still 0.01 cents, making the fee not a percentage but a fixed quantity which gets more expensive as the amount to transfer decreases.

Watch this to learn more: https://www.youtube.com/watch?v=X_hz7TyQ_bs

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    The fees as of today are much higher than you suggest, though still quite low in absolute terms. The usual fee for a simple transaction is BTC 0.0001, which at today's exchange rate is 3 euro cents, 300 times greater than your suggested number. – Nate Eldredge Oct 13 '14 at 14:42
  • lets say that we transfer bitcoin to brought something from merchant, its still had any transaction cost or not?? or its already include in the price? – Rizzma Widyawati Oct 14 '14 at 7:34

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