Daniel Aronoff, Kristian Praizner, Armin Sabouri
arXiv 19 Apr 2026 · cs.CE
arXiv:2604.17183 · PDF · DOI · OpenAlex · Extracted main text
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 priority and network state to expected confirmation delay. We then estimate how fees respond to that delay technology and to transaction characteristics. We find that congestion is the main determinant of delay; that the marginal value of priority is priced in fees, which is increasing in the gradient of confirmation time reduction per movement up in the fee queue; and that transactor choice of RBF, CPFP, and block conditions have economically important effects on fees.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Gur Huberman, Jacob D Leshno, and Ciamac Moallemi (2021) Monopoly without a Monopolist: An Economic Analysis of the Bitcoin Payment System | 0.830 | 7 | 3 | 57% |
| 2 | Alfred Lehar and Christine A. Parlour (2020) Miner collusion and the bitcoin protocol | 0.644 | 2 | 2 | 100% |
| 3 | Malte Möser and Rainer Böhme (2015) Trends, tips, tools: A longitudinal study of bitcoin transaction fees | 0.405 | 1 | 1 | 100% |
| 4 | David Easley, Maureen O'Hara, and Soumya Basu (2019) From mining to markets: The evolution of bitcoin transaction fees | 0.405 | 1 | 1 | 100% |
| 5 | Victor Chernozhukov, Denis Chetverikov, Mert Demirer, Esther Duflo,… (2018) Double/debiased machine learning for treatment and structural parameters | 0.000 | 1 | 1 | 0% |
| 6 | Edward H. Clarke (1971) Multipart pricing of public goods | 0.000 | 1 | 1 | 0% |
| 7 | Theodore Groves (1973) Incentives in teams | 0.000 | 1 | 1 | 0% |
| 8 | Adrian Pagan (1984) Econometric issues in the analysis of regressions with generated regressors | 0.000 | 1 | 1 | 0% |
| 9 | William Vickrey Counterspeculation, auctions, and competitive sealed tenders | 0.000 | 1 | 1 | 0% |
Showing the top 9 of 9 scored citations.