A Model and Estimation of the Bitcoin Transaction Fee
Bitcoin transaction fees will become more important as the block subsidy declines, but fee formation is hard to study with blockchain data alone because the relevant queueing environment is unobserved. We develop and estimate a structural model of Bitcoin fee choice that treats the mempool as a market for scarce blockspace. We assemble a novel, high-frequency mempool panel, from a self-run Bitcoin node that records transaction arrivals, exits, block inclusion, fee-bumping events, and congestion snapshots. We characterize the fee market as a Vickery-Clarke-Groves mechanism and derive an equation to estimate fees. In the first-stage we estimate a monotone delay technology linking fee-rate p...
| Authors | Daniel Aronoff, Kristian Praizner, Armin Sabouri |
|---|---|
| Primary category | cs.CE |
| Published | 19 April 2026 |
| Last updated at source | 19 April 2026 |
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