mw-fees.md
## Compact representation of fees for Mimblewimble
### 1. Introduction
The Mimblewimble (MW) protocol requires each transaction to specify an explicit fee amount. It is usually stored in the transaction kernel and signed with the kernel public key to prevent tampering. However, the ~100-byte kernel is the only part of a MW transaction that needs to be stored in the blockchain indefinitely. If the transaction fees are stored with full 64-bit precision, the fees may represent up to 8 percent of the whole blockchain download size as the transaction history grows.
#### 1.1 Contribution
This article describes a method to encode transaction priority and fee value in just 2 bytes (16 bits). The main idea is that instead of encoding the fee with the fixed precision of 1 atomic currency unit, we can encode the fee with a relative precision of about 0.1%-0.3%, which should be acceptable to most users.
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