A Bitcoin user made a costly mistake on Sunday when they paid an astonishing fee of 19 Bitcoin, equivalent to about $509,563, for a single transaction. The fee was spotted by Whale Alert, a service that tracks large cryptocurrency transactions, and reported by several news outlets.
The transaction involved sending 0.0001 Bitcoin, worth about $2.7, from one address to another. The sender paid a fee that was more than 185,000 times the amount they transferred. The fee was also much higher than the current average Bitcoin transaction fee of around $1.4.
According to Jameson Lopp, a prominent figure in the cryptocurrency community, the address that paid the fee is likely a withdraw-only hot wallet tied to an enterprise. He said that the address only receives deposits from one address to top up its balance every now and then, and spends it in a long peel chain, meaning it sends all its balance to a new address each time.
Lopp suggested that the user likely calculated their change output incorrectly, resulting in the excessive fee. He also said that the address has received and sent more than 60,000 transactions from the same address, which is considered a bad practice for privacy and security reasons.
Another Bitcoin proponent, Seth Michael Steele, said that the fee was probably a user-end mistake, and not a reflection of the value of block space on the Bitcoin network. He said that block space is critical for the well-being of the network in the long run, as it increases miner compensation and therefore security.
The fee was collected by an unknown miner who included the transaction in block number 703,443. The miner also received the regular block reward of 6.25 Bitcoin, worth about $167,000. The total income of $676,563 for mining one block is one of the highest ever recorded on the Bitcoin network.
This is not the first time that a Bitcoin user has paid a hefty fee for a transaction. In June 2020, a user paid 2.6 Bitcoin, worth about $47,000 at the time, for sending 0.55 Bitcoin. In May 2020, another user paid 2.66 Bitcoin, worth about $45,000 at the time, for sending 0.01 Bitcoin.
These incidents highlight the importance of double-checking the transaction details before sending any amount of Bitcoin. Users should also use wallets that allow them to set custom fees and avoid using the same address for multiple transactions.
