An unknown bitcoin user attached a total of $204,000 in fees to a series of transactions on July 6th. Earlier this week, BTC.com -the world’s seventh largest bitcoin mining pool- discovered these transactions and excessive fees were sent from the same user. The transactions included many inputs and outputs and p2sh / multi-signature transactions.
80 BTC as a Transaction Fee?! What Happened?
Currently, Bitcoin blockchain fee estimations put a median-sized transaction at about $0.20 for the transaction to be picked up from the mempool. According to 21 Inc, the median transaction size is 226 bytes.
The size of bitcoin transactions can greatly vary depending on the number of inputs and outputs, along with other factors such as multi-sig and P2SH. Due to this variance in the size of transactions, fee estimators used by leading wallets calculate recommended fees by a “satoshis per byte” model.
According to BTC.com’s head of business development, Alejandro De La Torre, several transactions in the block with a similar profile took half of the entire block’s space. More importantly, Torre emphasized that the sender attached a fee that is 29 times higher than the normal fee rate or recommended satoshis per byte ratio.
Even though the sender only should have paid around 2 Bitcoin -which is worth over $5,000 at the time of writing-as the transaction fee, the sender attached an excessively high fee of 80 bitcoin. At the time of writing, that is over $204,000 in transaction fees.
“Several transactions in the block with a similar profile (many inputs, many outputs, p2sh|multisig, paying 29x normal fee rate) took half of the block’s space ~ (500kB). At that time ~400 sat/byte was the normal priority fee which would amount to roughly 2 BTC in cost.”
Almost immediately after discovering this, BTC.com announced on its official blog that it is willing to refund 78 bitcoin to the sender.
“If that was your transaction, we want to help. We’re not interested in making a quick buck, especially if it comes at the loss of another bitcoiner. That’s why we’re reaching out,” said the BTC.com team.
At first, members of the community were left confused by the statement of BTC.com, which read, “All things said and done, the correct fee should have been approximately 2 BTC.”
The Merkle reached out to BTC.com and asked the team how several transactions can lead to a 2 bitcoin fee, especially when the size of the Bitcoin mempool -the holding area for unconfirmed transactions- has been declining at a rapid rate.
BTC.com told The Merkle that the transactions in question had around 17 inputs, with a staggering 3,920 satoshis per byte. In order to truly understand how much of a large fee that is, Blockchain currently recommends a fee of less than 100 satoshis per byte for all transactions. Even with a fee less than 100 satoshis per byte, transactions are likely to be confirmed within minutes after being sent.
It is refreshing to see companies like BTC.com try to help out a fellow Bitcoiner when they mistakenly attach a $200,000 fee to their transactions. What exactly caused this will likely remain a mystery.