What are transaction fees in Bitcoin?

Transaction fees in Bitcoin are payments made by users to miners to incentivize the inclusion of their transactions in the blockchain. Miners validate transactions and add them to blocks, which are then appended to the blockchain. This process requires computational resources, and fees serve as a reward for miners, encouraging them to prioritize transactions for inclusion in the next block.

When users create a Bitcoin transaction, they can choose the fee amount; higher fees typically result in faster confirmation times, as miners are more likely to select transactions with higher fees to maximize their earnings. This dynamic helps regulate the network's transaction processing by incentivizing miners to execute as many transactions as possible while maintaining security.

Understanding this mechanism is crucial for users as it directly affects their transaction speeds and costs. The other choices do not aptly describe transaction fees within the Bitcoin network: payments to wallets do not reflect the miner's role, fixed fees do not exist as fees vary based on network demand, and exchange fees are separate from blockchain transaction fees.