Bitcoin Core Fee Estimate Algorithm
In bitcoin, the total size of transactions added to the chain in a specific time is limited. This creates a fee market. Transactions with a higher fee rate are likely to be confirmed more quickly. A good fee estimator predicates which fee rate to pay where there is a high probability the transaction will be confirmed into the chain within the target period. Bitcoin core has the builtin support to estimate the fee rate. Understanding its algorithm can help us to migrate it and improve it. This first part of this article introduces the core estimation algorithm. The algorithm determines which statistics data to track, and the second part shows how Bitcoin Core tracks them. The last part describes the extensions to the core algorithm for better performance.