Blockstream App operates on a variety of networks such as Bitcoin, Liquid, and the Lightning Network. These bitcoin-focused networks have limited resources in terms of the volume or size of payments they can handle at any one time, so fees are charged as a way to handle the prioritization of transactions.
The fee amount and how it is calculated will depend on the network that is being used to send the transaction.
Note: Transaction fees in the Blockstream App are paid to those who process transactions on the Bitcoin, Liquid, and Lightning networks. These fees are not paid to Blockstream.
Transaction fees on Bitcoin
Bitcoin will tend to have the highest fees of the three networks integrated into Blockstream App because it is the most decentralized and has a need to keep the cost of operating a full node low. A new block of transactions is mined roughly every ten minutes on the Bitcoin network, and each block is limited by the data size of transactions rather than the amount of bitcoin involved in the transactions.
Due to the limited capacity of the Bitcoin network, fees can spike during times of high demand. In rare instances, fees on the Bitcoin network have risen as high as $20 or more per transaction. Reasons for sudden spikes in demand can range from fear of missing out (FOMO) during a bitcoin price run to the deployment of new meta protocol tokens based on systems such as Ordinals or Runes.
Note: Due to the limited block space on the Bitcoin network and the unpredictability of the demand for block space, the fees associated with transactions on this network in the Blockstream App are best viewed as estimates. In situations where the fee is not sufficient for timely processing, it can be boosted to speed up the transaction.
Transaction fees on Liquid
Transaction fees on Liquid, which is a federated sidechain for Bitcoin, tend to be lower than the base Bitcoin network. That said, Liquid still has its own block size limit and a new block is generated once per minute by a group of functionaries. If Liquid were to see increased demand for block space, fees could eventually rise.
Much like Bitcoin itself, fees on Liquid transactions are based on the data size of the transaction. Up to this point, there hasn't been instances of short-term high demand on Liquid that have led to fee spikes on the network.
Transaction fees on the Lightning Network
The Lightning Network will generally be where the lowest transaction fees are found, at least outside of the fees associated with channel opening and closings. Technically, transactions sent via the Lightning Network can have zero fee associated with them. This is because the Lightning Network does not operate as a blockchain. Instead, it is a secondary layer for payments built on top of Bitcoin and Liquid where transactions can be signed and cached before eventually achieving final settlement at the blockchain layer.
Notably, fees on the Lightning Network are based on the payment amount rather than the data size-based approach seen in on-chain systems like Bitcoin and Liquid. If the fee associated with a Lightning Network payment is unusually high, it could be due to a lack of sufficient bitcoin liquidity on the Lightning nodes that are routing the payment.