Miners and validators receive a reward for successfully validating transactions and discouraging spam and malicious activity.

For blockchains using fee structures that vary depending on network activity, fees can get expensive due to network congestion. The fee amount paid determines the transaction's priority: the higher the fee paid, the faster the confirmation process.

Fireblocks allows you to set the fee when creating a new transaction.

• Custom fee: This is a customer-set fee. Custom fees are not adjusted once set. The fee specified is included when the transaction is submitted and signed.
• Tentative fee: This allows customers to select between slow, medium, and high fee rates that are dynamically calculated. The fee rate dictates the speed at which your transaction will be picked up and confirmed by the network. When setting a tentative fee rate, the displayed amount is an estimate and the fee calculation is not finalized until your transaction is signed.

UTXO fee rate calculation

When creating transactions on the blockchain network (and other UTXO chains), Fireblocks determines the previous incoming transactions in which the funds were included.

This affects the fee in two ways:

1. The fee increases if the funds were received across several incoming transactions. For example, sending 10 BTC that were received in one transaction will have different fees that sending 10 BTC received in ten different transactions).
2. The type of destination and the destination used in previous transactions also affect the fee. Fireblocks supports both Bech32/Segwit (starting with bc1) and legacy address types. To learn more about how address types affect fees, read the Legacy, SegWit, and Native SegWit addresses section of our Address Types and Formats article. 

As a result, the fee structure is very dynamic, even when sending a known amount to a known address. Therefore, Fireblocks can only provide the current state fee estimation of the account (while using the existing incoming transactions).

General fee rates for other blockchain systems

• Slow: Spend less on fees and take longer to confirm
• Medium: Spend an average fee amount and confirm in average time
• Fast: Spend more and confirm more quickly