Transaction Fee
By CoinGecko | Updated on Mar 03, 2020
Time and resources are required in order for miners and validators to hash and sign a block on the blockchain, a transaction fee the the blockchain users is an incentive mechanism for the miners and validators to contine playing their role and securing the network with computational powers.
Transaction fees are usually nominal and free-market based, where users can set the amount of fee they are willing to pay and the miners able to set the preference for which transaction to mine and reward from until an equilibrium is met.
Related Terms
Mining Reward
The reward resulting from contributing computing resources to process transactions
Protocol
The set of rules in a network in which participating members comply to allow proper communication.
Miners
Contributors to a blockchain taking part in the process of mining.
Distributed Ledger
Ledgers whose data is stored and synced across a network of nodes.
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