TL;DR
- Massive Fee Miscalculation: A panicked Bitcoin user mistakenly paid 0.75 BTC (around $60K) in fees when trying to adjust a transaction using the Replace-by-Fee (RBF) system.
- Error in Fee Settings: The mistake stemmed from misconfigured fee parameters—potentially entering 305,692 sat instead of 30.5692 sat or inadvertently including an entire UTXO—leading to an excessive fee.
- Cautionary Lesson: This incident underscores the risks of manual fee adjustments in Bitcoin transactions, highlighting the need for clear wallet tools and careful double-checking of transaction details.
A Bitcoin user has suffered a significant loss, mistakenly paying 0.75 BTC—approximately $60,000—in transaction fees due to a hasty decision. This event underscores the dangers associated with manual transaction configurations and the intricacies of Bitcoin’s replace-by-fee (RBF) system.
A Costly Replace-by-Fee Error
The transaction occurred just after midnight UTC on April 8, when the user attempted to modify an earlier Bitcoin transaction using the RBF feature. Initially, the user sent 0.48 BTC ($37,770) with 0.2 BTC ($16,357) in change, but a subsequent attempt to increase the fee resulted in an unexpectedly high charge.
Crypto forensics experts suggest the mistake may have stemmed from miscalculating the fee structure or confusing satoshi-per-byte settings. Instead of applying a reasonable fee adjustment, the user inadvertently included an entire unspent transaction output (UTXO) in the fee, leading to an excessive charge.
How the Error Happened
Anmol Jain, vice president of investigations at AMLBot, explained that the user may have intended to set a fee of 30.5692 sat but mistakenly entered 305,692 sat, drastically inflating the transaction cost.
Another possibility is that the user misinterpreted the fee settings in their wallet, leading to an overcorrection. Some wallets allow users to set fees in satoshis per virtual byte (sat/vB), which can confuse users when adjusting transaction costs manually.
The Risks of Replace-by-Fee Transactions
The RBF feature allows Bitcoin users to replace unconfirmed transactions with a new version that offers a higher fee, incentivizing miners to prioritize the updated transaction. While useful for speeding up transactions, RBF can also lead to unexpected errors, as seen in this case.
Bitcoin developers anticipated that miners would favor transactions with higher fees, but the decentralized nature of the network makes it difficult to prevent accidental overpayments.
Lessons for Bitcoin Users
This incident serves as a cautionary tale for Bitcoin users, emphasizing the importance of double-checking transaction details before submitting modifications.
Experts recommend using wallets with clear fee adjustment tools and avoiding manual overrides unless necessary. As Bitcoin adoption grows, understanding transaction mechanics will be crucial in preventing costly mistakes like this one.
