This feature helps you save on future bitcoin transaction fee by showing a txfee score of your wallet.
By using a correct wallet type you can get upto 38% fee discount. You can have three types of wallets:
- Legacy/Normal - Caution - These are legacy wallets generating addresses starting with 1. Common example of such wallet is blockchain.info
- Segwit in P2SH - Good - These are walllets generating addresses starting with 3. Common example of such wallets is electrum/mycelium/ledger. You can watch the below video to know on how to generate P2SH wallet in electrum
- Native Segwit - Best - These are wallets having addresses starting with prefix bc1. The easiest way to create a native segwit wallet is to use electrum wallet.
Choose Segwit option when creating wallet
Receiving address in a native segwit wallet
If your wallet has lot of txouts or transaction outputs, it will cost you high fee whenever you try to send bitcoin.
- Number of txout > 20 - Caution
- Number of txout is between 10 to 20 - Good
- Number of txout < 10 - Best
You can follow the below steps to reduce your wallet fragmentation:
Step 1: Wait for time when bitcoin network congestion is low. Bitcoin network is usually less congested in weekends - Saturday or Sunday. You can use mempool.space website to check bitcoin network status
Bitcoin Network with low congestion. There are very few waiting blocks
Bitcoin network with high congestion. There are lots of waiting blocks with high fee
Step 2: Send complete wallet balance to yourself with low fee
Step 3: Wait for transaction to confirm and you should have a much better TxFee score
In summary, you can use our TxFee score feature to check reduce fragmentation/structure problems in your wallet and save on bitcoin transaction fee.