Lightning Fee Calculator — BOLT 11 Route Estimate

How Lightning Network fees work

The Lightning Network enables Bitcoin payments that confirm in milliseconds, cost fractions of a cent, and scale to millions of transactions per second — all without touching the Bitcoin blockchain for every individual payment. To accomplish this, Lightning routes payments across a network of payment channels, and each routing node along the path charges a small fee for forwarding the payment. This calculator models that fee using the standard Lightning fee formula.

The fee model: base + proportional

Every Lightning node that forwards a payment charges according to two parameters it sets independently:

Base fee: A flat fee in millisatoshis (msat), charged once per payment regardless of size. Most routing nodes set this between 0 and 1,000 msat (0–1 sat). A base fee of 1,000 msat means the node charges exactly 1 sat to forward any payment, whether it’s 1,000 sats or 100,000,000 sats.

Proportional fee (ppm): A fee expressed in parts per million of the payment amount. A rate of 10 ppm means the node charges 10 satoshis per million satoshis routed, or equivalently 0.001% of the payment. At this rate, forwarding 100,000 sats costs 1 sat; forwarding 1,000,000 sats costs 10 sats.

The combined fee formula for a single hop is:

hop_fee = base_fee_sats + (payment_amount_sats × ppm) / 1_000_000

For a multi-hop payment traversing N hops, the total fee accumulates across all routing nodes:

total_fee = N × (base_fee_sats + (amount × ppm) / 1_000_000)

This is a simplified model that assumes uniform channel policies across all hops. In reality, each hop has its own base fee and ppm. This tool lets you set a single policy and apply it uniformly — which is a good approximation for planning purposes and for understanding fee sensitivity.

Why Lightning fees are usually pennies

The numbers above underscore why Lightning is transformative for small Bitcoin payments. Consider a $10 payment at a BTC price of $100,000:

• $10 = 10,000 sats
• At 3 hops with 1 sat base fee and 10 ppm each:
  • Total fee = 3 × (1 + 10,000 × 10 / 1,000,000) = 3 × (1 + 0.1) = 3.3 sats
  • At $100,000/BTC, 3.3 sats ≈ $0.0033 — a third of a cent

Contrast this with on-chain Bitcoin, where a typical transaction at 5 sat/vbyte for a Native SegWit transaction costs around 700 sats — about $0.70 at the same price. Lightning is roughly 200 times cheaper for this example, and the advantage grows as fees are expressed per-hop rather than per-byte.

Credit card networks charge merchants 1.5–3.5% of transaction value. At 10 ppm per hop and 3 hops, Lightning charges 0.003% — three orders of magnitude less.

Multi-hop paths and path finding

The number of hops in a Lightning payment path depends on the network topology. A direct channel between payer and payee costs zero routing fees (you pay only the on-chain commitment transaction fee when opening and closing the channel). When no direct channel exists, the Lightning node’s path-finding algorithm selects a route through intermediate nodes, minimizing fee cost subject to liquidity constraints.

Typical payments on the Lightning Network traverse 2–5 hops. Payments with fewer hops are cheaper; payments requiring many hops (6+) are unusual in a well-connected network and signal a poorly positioned node or low-liquidity path.

The 1–8 hop range in this calculator covers the realistic full spectrum. A direct payment is 0 hops with 0 routing fees (set hops to 1 with 0 base fee and 0 ppm to simulate near-direct routing). Eight hops is an upper bound that would occur only in a very fragmented network graph.

Channel liquidity and why fees vary

Not all channels have adequate liquidity in both directions. If Alice wants to pay Bob through Carol, the channel between Alice and Carol must have sufficient outbound liquidity (from Alice’s side) and the channel between Carol and Bob must have sufficient inbound liquidity (from Carol’s side). When liquidity is tight on a particular path, the path-finding algorithm seeks an alternate route, which may have higher fees or more hops.

This liquidity constraint is the primary reason real routing fees sometimes exceed the simple formula. In a well-balanced network with deep liquidity, fees approach the theoretical minimum. During periods of network stress or for unusually large payments, fees can be several times higher as the algorithm exhausts cheap paths and falls back to more expensive routes.

FAQ

Why are Lightning fees so much cheaper than on-chain fees?

On-chain fees compensate miners for permanently storing your transaction in Bitcoin’s blockchain — a resource shared by every Bitcoin user for the life of the network. Lightning fees compensate routing nodes only for the temporary use of their locked capital in payment channels, and the service is provided almost instantaneously. The economics are fundamentally different: on-chain fees are a fee for permanent global data storage; Lightning fees are a fee for momentary capital deployment.

What does ppm mean?

PPM stands for parts per million. It is a unit for expressing very small ratios. 1 ppm = 0.0001% = 0.000001 (as a decimal multiplier). A node charging 100 ppm earns 100 satoshis per million satoshis forwarded, or 0.01% of the payment. Most competitive routing nodes charge between 1 and 500 ppm, with 10–100 ppm being common for well-connected nodes on popular payment corridors.

How does channel liquidity affect routing?

Each payment channel has a fixed total capacity and a split between the local balance (your side) and the remote balance (the other node’s side). A payment can only flow in a direction if there is sufficient balance on the sending side. If Alice’s channel to Bob has 100,000 sats capacity but all of it is on Bob’s side (remote balance), Alice cannot route any payment through that channel toward Bob’s side. Managing channel liquidity — keeping a reasonable split of funds — is the primary operational challenge for Lightning routing nodes.

Can I pay zero routing fees?

Yes, in two scenarios: (1) you have a direct channel with the payee and the payment fits within your outbound balance, or (2) a routing node has set both its base fee and ppm to zero. Some nodes do set zero fees on certain channels to attract flow and collect the proportional fee on higher-volume corridors. In practice, zero-fee routing is available for small, common-direction payments on well-established corridors.

What is a realistic fee for a typical payment?

For a 10,000–100,000 sat payment (roughly $10–$100 at $100k/BTC) across 3 hops at 1 sat base fee and 10 ppm, the total routing fee is typically 3–4 sats — well under one US cent. For larger payments (1,000,000 sats = 0.01 BTC ≈ $1,000), the same policy yields about 33 sats or about $0.033. Lightning fees scale very efficiently with payment size.

Does this tool account for HTLC overhead?

No. In addition to the routing fee, each hop in a Lightning payment involves an HTLC (Hash Time-Locked Contract) which adds a small amount of reserved capital requirement and, in failure cases, an on-chain fallback fee. For successful payments, HTLC overhead is not separately charged — the fee parameters above are the complete cost. This tool models the standard fee policy only and ignores edge cases like payment failures or force-closed channels.