Transaction Fee (TX Fee)

Transaction fee is defined as payment made to people who do the work of keeping an accurate, up-to-date blockchain ledger, by verifying the correctness of transactions.

Typically, when you send money using banks or receive money as a business, you pay the bank a fee. This fee covers their costs for hiring people to do the work involved in your transaction.

With cryptocurrencies, there are no banks. Instead, people use their computers to verify transactions are correct and then record this information in the blockchain. Because there are thousands of transactions happening every minute, fees motivate these people to do this computer work.

If you provide a larger fee, typically your transaction can jump the line and get recorded first. In other words, the larger the fee, the greater the chance of your transaction going through sooner than the rest.