Cost Comparison

Understanding the true cost of each protocol is essential for efficient agent operation. This guide covers transaction costs, operational overhead, and total cost of ownership.

Transaction Costs

Bitcoin On-Chain

Fee Priority	sat/vB	Cost (250 vB tx)	Wait Time
High priority	50-200	$1.25-$5.00	Next block
Medium priority	20-50	$0.50-$1.25	1-3 blocks
Low priority	5-20	$0.12-$0.50	3-6 blocks
Economy	1-5	$0.02-$0.12	Hours/days

Note: Fees vary dramatically based on network congestion. During high-fee periods, even “low priority” can exceed $20.

async def estimate_bitcoin_fee(priority: str = "medium") -> dict:
    """Estimate Bitcoin transaction fee."""
    resp = await fetch("https://mempool.space/api/v1/fees/recommended")
    fees = resp.json()

    priority_map = {
        "high": fees["fastestFee"],
        "medium": fees["halfHourFee"],
        "low": fees["hourFee"],
        "economy": fees["economyFee"]
    }

    sat_per_vb = priority_map.get(priority, fees["halfHourFee"])
    typical_tx_size = 250  # vBytes for 1-in-2-out

    return {
        "sat_per_vb": sat_per_vb,
        "estimated_fee_sats": sat_per_vb * typical_tx_size,
        "priority": priority
    }

Lightning Network

Cost Type	Amount	When
Routing fee	0-50 sats + 0-0.1%	Per payment
Base fee	0-1 sat	Per hop
Channel open	250-500 vB on-chain	Opening channel
Channel close	200-400 vB on-chain	Closing channel

Effective cost per payment: Usually <$0.01 for payments under $1,000

def estimate_lightning_fee(amount_sats: int, hops: int = 3) -> dict:
    """Estimate Lightning payment fee."""
    # Typical routing fee structure
    base_fee_per_hop = 1  # sats
    proportional_fee = 0.0001  # 0.01% per hop

    total_base = base_fee_per_hop * hops
    total_proportional = int(amount_sats * proportional_fee * hops)

    return {
        "base_fee_sats": total_base,
        "proportional_fee_sats": total_proportional,
        "total_fee_sats": total_base + total_proportional,
        "fee_percentage": (total_base + total_proportional) / amount_sats * 100
    }

# Examples:
# 10,000 sats (3 hops): 3 + 3 = 6 sats (0.06%)
# 100,000 sats (3 hops): 3 + 30 = 33 sats (0.033%)
# 1,000,000 sats (3 hops): 3 + 300 = 303 sats (0.03%)

Nostr Protocol

Cost Type	Amount	Notes
Publishing events	Free	Most relays
Paid relay subscription	$5-$20/month	Spam-reduced
NIP-05 identifier	$0-$20/year	Optional
Zap fees	Lightning fee	For payments

Effective cost per message: $0 (or Lightning fee for zaps)

Operational Costs

Bitcoin Infrastructure

Component	Monthly Cost	Purpose
Full node (self-hosted)	$10-30	Electricity + storage
Full node (cloud)	$20-50	VPS + storage
Block explorer API	$0-100	Depends on volume
Electrum server	$20-40	Light wallet backend

Lightning Infrastructure

Component	Monthly Cost	Purpose
Lightning node	$10-50	VPS + monitoring
Channel capital	Opportunity cost	Locked funds
Watchtower	$5-20	Fraud protection
LSP subscription	$0-30	Channel management
Rebalancing fees	Variable	Liquidity maintenance

Capital lockup calculation:

def calculate_channel_opportunity_cost(
    channel_capacity_sats: int,
    annual_return_rate: float = 0.05  # 5% opportunity cost
) -> dict:
    """Calculate opportunity cost of channel capital."""
    btc_price = 100_000  # Approximate
    capacity_usd = (channel_capacity_sats / 100_000_000) * btc_price
    annual_cost = capacity_usd * annual_return_rate
    monthly_cost = annual_cost / 12

    return {
        "capacity_sats": channel_capacity_sats,
        "capacity_usd": capacity_usd,
        "monthly_opportunity_cost_usd": monthly_cost,
        "break_even_volume_sats": int(monthly_cost / 0.001 * 100_000_000)
    }

# Example: 10M sats channel
# Capacity: $10,000
# Monthly opportunity cost: $41.67
# Need to route $4,167 worth to break even at 0.1% fees

Nostr Infrastructure

Component	Monthly Cost	Purpose
Relay hosting	$5-50	If running own relay
Paid relay subscriptions	$5-20	Quality access
NIP-05 domain	$1-5	Identity verification
Backup relays	$0	Redundancy

Total Cost of Ownership

Scenario 1: Low-Volume Agent (100 tx/month)

Protocol	Transaction Fees	Infrastructure	Total Monthly
Bitcoin	$50-500	$20 (API)	$70-520
Lightning	$0.50-5	$30 (node)	$30-35
Nostr	$0	$10 (relays)	$10

Recommendation: Lightning for payments, Nostr for communication

Scenario 2: High-Volume Agent (10,000 tx/month)

Protocol	Transaction Fees	Infrastructure	Total Monthly
Bitcoin	$5,000-50,000	$50 (node)	Impractical
Lightning	$50-500	$100 (multi-node)	$150-600
Nostr	$0	$50 (private relay)	$50

Recommendation: Lightning for payments, private Nostr relay

Scenario 3: Occasional Large Settlements

Protocol	Transaction Fees	Infrastructure	Total Monthly
Bitcoin	$10-50 per tx	$0 (public APIs)	$10-50
Lightning	N/A for large	N/A	N/A

Recommendation: Bitcoin for settlements >$10,000

Cost Optimization Strategies

Bitcoin Optimization

Batch transactions: Combine multiple outputs into single transaction
Time transactions: Send during low-fee periods (weekends, early morning UTC)
Use SegWit: 30-40% fee savings vs legacy addresses
Consolidate UTXOs: During low-fee periods, merge small UTXOs

def optimal_bitcoin_send_time() -> dict:
    """Recommend optimal time to send Bitcoin transaction."""
    # Historical low-fee patterns
    return {
        "best_days": ["Saturday", "Sunday"],
        "best_hours_utc": [2, 3, 4, 5, 6],  # 2-6 AM UTC
        "avoid_days": ["Tuesday", "Wednesday"],
        "avoid_hours_utc": [14, 15, 16, 17]  # 2-5 PM UTC (US trading hours)
    }

Lightning Optimization

Maintain balanced channels: Reduces rebalancing costs
Use MPP: Multi-path payments find cheaper routes
Choose low-fee nodes: Connect to efficient routing nodes
Batch channel opens: Open multiple channels in one transaction

Nostr Optimization

Use efficient relays: Avoid slow/expensive relays
Cache relay lists: Reduce NIP-65 lookups
Batch events: Combine related events when possible
Use paid relays strategically: Better reliability, less spam

Cost Comparison Calculator

def compare_protocol_costs(
    amount_sats: int,
    transactions_per_month: int,
    urgency: str = "medium"
) -> dict:
    """Compare costs across protocols for given usage pattern."""

    # Bitcoin costs
    btc_fee_per_tx = estimate_bitcoin_fee(urgency)["estimated_fee_sats"]
    btc_monthly = btc_fee_per_tx * transactions_per_month

    # Lightning costs (assuming existing channels)
    ln_fee_per_tx = estimate_lightning_fee(amount_sats)["total_fee_sats"]
    ln_monthly = ln_fee_per_tx * transactions_per_month
    ln_infra = 30 * 100_000  # $30 in sats for node

    # Nostr (free for messages)
    nostr_monthly = 10 * 100_000  # $10 for relay access

    return {
        "bitcoin": {
            "per_tx_sats": btc_fee_per_tx,
            "monthly_sats": btc_monthly,
            "recommended": transactions_per_month < 10 and amount_sats > 1_000_000
        },
        "lightning": {
            "per_tx_sats": ln_fee_per_tx,
            "monthly_sats": ln_monthly + ln_infra,
            "recommended": transactions_per_month > 10 or amount_sats < 1_000_000
        },
        "nostr": {
            "per_tx_sats": 0,
            "monthly_sats": nostr_monthly,
            "recommended": True  # Always good for communication
        }
    }

Break-Even Analysis

When to Switch from Bitcoin to Lightning

Monthly Transactions	Bitcoin Cost	Lightning Cost	Use Lightning?
1-5	$5-25	$30 (node)	No
5-20	$25-100	$31-35	Maybe
20-100	$100-500	$32-50	Yes
100+	$500+	$40-100	Definitely

Break-even point: ~15-20 transactions/month for small payments

Machine-Readable Summary

{
  "topic": "cost-comparison",
  "audience": "ai-agents",
  "cost_categories": [
    "transaction_fees",
    "infrastructure",
    "opportunity_cost",
    "operational_overhead"
  ],
  "typical_costs": {
    "bitcoin_per_tx_sats": "500-50000",
    "lightning_per_tx_sats": "1-100",
    "nostr_per_tx_sats": 0
  },
  "break_even_monthly_txs": 15,
  "optimization_strategies": [
    "batch_transactions",
    "time_transactions",
    "use_segwit",
    "balance_channels"
  ]
}