How much does a Lightning payment cost?
A Bitcoin payment via the Lightning network is significantly cheaper than a Bitcoin payment via the Blockchain. But what exactly does a Lightning payment cost and how are the costs of a Lightning transaction calculated?
A Lightning payment is free of charge if the payer and the recipient of the Lightning payment operate a common Lightning channel.
If there is no shared channel and additional Lightning Nodes are required to route the payment, each Lightning Node in between may charge a fee (routing fee).
Each Lightning Node can set the fees to be paid when a Lightning payment is to be routed through its Lightning Node.
There are two types of fees for a Lightning transaction:
- Base Fee – A fee charged per transaction.
- Fee Rate / variable fee – A fee depending on the amount
The Base Fee is paid per Lightning transaction. It is irrelevant how high the invoice amount is. The base fee is set in mSats and is equal to one thousandth of a Satoshi.
The standard fee is usually given as 1,000 mSats, which is equivalent to 1 Satoshi.
1000 mSats = 1 Sats = 1 Satoshi = 0.00000001 BTC
The fee rate is calculated from the amount to be forwarded.
The fee rate is given in milli mSats. One milli mSats corresponds to one millionth of a Satoshi or 0.000001 Sats (1/1,000,000)
The standard charge is usually given as 1 milli mSats.
Instead of the specification in milli mSats, the designation ppm is also used. The ppm stands for parts per million or likewise one millionth.
An example of a Lightning transaction for 100,000 sats
We want to make a payment from our Node A to Node C. Since there is no direct channel between Node A and Node C, we need Node B to forward our Lightning payment.
Node B charges the following fees:
Base Fee: 1.000 mSats = 1 Sat
Fee rate per sat: 1 milli mSats = 0,000001 Sat
The formal is: Base Fee + Fee Rate X Invoice Amount
With the values of node B: 1 Sat + 0.000001 x invoice amount
For an invoice amount of 100,000 sats:
1 Sat + 0.000001 x 100,000 Sats = 1.1 Sat
At a bitcoin rate of €25,000, this is €0.0002, far less than 1 cent.
Average cost of a Lightning payment
What is the average cost of a Lightning payment?
On the Mempool.Space site there is a statistic about the average cost of a Lightning payment.
At block time 778098, the values were as follows:
- Base Fee 758 mSats
- Fee Rate 446 ppm
A Lightning payment of 100,000 sats then results in the following calculation:
0.758 Sats (Base Fee) + 100,000 x 0.000446 (Fee Rate)
= 0.758 sats + 44.6 sats
= 45.358 Sats = € 0.01
This fee must be paid to each Lightning Node involved between the payer and the recipient of the payment. If a route requires multiple hops, then these can be correspondingly more satoshi.
But it can be stated: A Lightning transaction costs less than 1 cent on average. The cost of a Lightning transaction is usually more in the milli-cent range.