Understanding Bitcoin and Muun Wallet Fees: Why Your Balance Has Fluctuated

As users of cryptocurrency services like Bitcoin, blockchain platforms, or wallets, it’s not uncommon to encounter issues with balances and fees. In this article, we’ll dive deeper into the concept of Bitcoin fees, specifically how they work in the context of Muun Wallet, as well as why you may have experienced a significant fluctuation in your balance.

Bitcoin Fees: A Brief Overview

Bitcoin (BTC) fees are charges associated with transactions on the Bitcoin network. They are calculated based on the number of confirmations required for a transaction to be included in a block, as well as the average time it takes to confirm a transaction across the network. These fees can vary greatly depending on the complexity of the transaction and the network load.

Muun Wallet Fees: An In-Depth Analysis

When you use Muun Wallet to send or receive Bitcoin, you are essentially initiating a transaction with your wallet account. The fee is determined by the Muun algorithm, which takes into account several factors, such as:

• Transaction amount: The higher the transaction amount, the higher the fee.

• Network congestion: When the network is congested, fees increase to discourage spam transactions and ensure faster transaction times.

• Confirmations: The more confirmations required for a transaction (e.g. 6 confirmations), the higher the fee.

In his scenario, he sent 10,000 Sats to an external BTC wallet using the Muun fee of 1 sat per vB (total value of Bitcoin). This means that for every 0.01 sat of value, he paid a fee of 1 sat.

Why your balance fluctuated

Initially he had 10,500 Sats in his Muun wallet. When you sent the 10,000 Sats to the external BTC wallet, you expected your balance to remain at 10,500 Sats after the transaction. However, due to several factors that we will explore below, your actual balance decreased.

Here are some possible reasons:

• Transaction complexity: The external Bitcoin wallet may have required more confirmations (e.g. multiple rewrites) than expected, increasing the overall fee.

• Network congestion: As mentioned above, network congestion can lead to higher fees and slower transaction times.

• Speed ​​limits or throttling: Muun may have imposed rate limits on your transactions, which restrict the number of transactions you can make in a given period of time.

Bitcoin Fee Calculation

To estimate the fee, we will need to calculate the number of confirmations required for the transaction:

Assuming an average block time of 10 minutes and a maximum of 6 confirmations per transaction:

Transaction amount: 10,000 Sats (approximately 1 BTC)
Network congestion factor: 2 (a rough estimate for moderate network load)
Total transactions: 10,500 / 0.5 = 21,000 transactions
Maximum confirmations: 6

Estimated number of blocks involved in the transaction
Estimated blocks: 21,000 / 100 (average block time) ≈ 210 blocks
Block time: 10 minutes
Transaction time: 1 minute (average)

Estimated confirmations required for the transaction
Confirmations: 210 * 6 = 1260 confirmations
Total fee calculation:
Fee per vB = Total value of Bitcoin / Number of confirmations × 1 sat/vB
= Amount of BTC × 1 sat/vB / Confirmations × 1 sat/vB
= 10,000 Sats / 1260 confirmations ≈ 7.91 sats

Calculation of fee in Muun coin (sat)
Fee = Fee per vB × Number of SAT
= 7.91 sat × 10,000 SAT ≈ 79,100 sat

Why the fluctuation?

The decrease in your balance from 10,500 Sats to around 280 Sats is likely due to a combination of factors:

• External transaction complexity: The external Bitcoin wallet may have required more confirmations than expected.

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