The Bitcoin network determines its fees through a mechanism known as fee market or fee market auction. When you send a Bitcoin transaction, you can include a transaction fee as an incentive for miners to include your transaction in a block and prioritize its processing. Miners, who are responsible for confirming and adding transactions to the blockchain, typically prioritize transactions with higher fees because it allows them to earn more rewards.

The fee for a Bitcoin transaction is determined by the sender of the transaction. When you create a Bitcoin transaction, you can specify the fee amount you're willing to pay. If you set a higher fee, your transaction is more likely to be included in the next block, resulting in faster confirmation. Conversely, if you set a lower fee, your transaction may take longer to be included in a block, especially during times of high network congestion.

Miners have the freedom to choose which transactions to include in their blocks based on the fees attached to those transactions. When there are more transactions waiting to be confirmed than can fit in a block, miners prioritize the transactions with higher fees, as they are economically incentivized to do so. This creates a competitive fee market where users bid for limited space within blocks by offering higher fees.

Wallet software and various online platforms often provide fee estimation algorithms that analyze the current state of the network and suggest an appropriate fee for your transaction. These estimations are based on factors such as the current network congestion, the size of your transaction in bytes, and the fee levels observed in recent blocks.

It's important to note that the Bitcoin network does not have a fixed fee structure determined by a central authority. The fees are determined by the supply and demand dynamics of the network, making it a market-driven process.