Panicked Bitcoiner mistakenly pays almost $60K BTC in fees
A Bitcoin user accidentally paid 0.75 BTC in transaction fees after a panic-induced replace-by-fee error, highlighting the risks of manual transaction settings in crypto wallets.
One presumably panicked Bitcoin user paid almost 0.75 BTC (worth around $60,000 at the time) in a replace-by-fee (RBF) transaction fee.
The transaction in question was sent about 30 minutes after midnight UTC on April 8. It was the second attempt at performing an RBF that changed the transaction’s target address, sending 0.48 Bitcoin ($37,770) with 0.2 BTC of change ($16,357).
Anmol Jain, vice president of investigations at crypto forensics firm AMLBot, told Cointelegraph that the original transaction featured a “default or conservative” fee. The first RBF raised the fee to nearly double the amount and changed the output address.
Both of those transactions are waiting for a confirmation that will never come. This is because the much higher fee RBF transaction took its place with the same output as the second RBF transaction — presumably, an attempt to bump the fee to ensure that the RBF is processed rather than the original transaction.
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A presumed panic-induced error
The transaction has signs of a panic-induced error, with the user sending a subsequent transaction fast to prevent the original transaction from being included in a block and becoming final. Jain suggested some potential explanations:
“Maybe he meant to use 30.5692 sat but, due to haste or butter fingers, ended up using 305,692 sat.“
The second RBF transaction also added an additional input unspent transaction output (UTXO). This UTXO contained nearly 0.75 Bitcoin . The change was mistakenly included as part of the fee, likely because the user failed to update the change address or misjudged the transaction’s structure.
Another possibility raised by Jain is that the user got confused between a fee in absolute terms and one set in satoshi per virtual byte (transaction size) or that the automated script behind the transaction contained a bug. The wallet could allow setting a fee in satoshis, which could lead to a scenario where the fee is set way too low, a warning about the low fee and an overcorrection:
“System reads it as 30 sats total fee, which is way too low, so user types 305000 thinking it means 30.5 sat/vB, and the wallet actually applies 305,000 sats/vB, which is insane.“
Replace-by-fee: a controversial feature
RBF is a widely misunderstood and controversial feature of Bitcoin. Bitcoin transactions are considered non-final until they are included in a block, with further confirmation by more blocks in the same chain.
Transactions in the mempool are at the mercy of miners — who are expected to be profit-driven. Bitcoin developers foresaw that with multiple conflicting Bitcoin transactions, the financial incentive would be to process the one paying the higher fee.
There is no easy way to prevent Bitcoin miners from simply including the transaction that was sent first, and it is also not straightforward to establish which transaction was submitted first due to the decentralized nature of the network. Consequently, this incentive was recognized in the RBF feature, allowing users to edit unconfirmed transactions by submitting an alternative transaction with a higher fee.
This led to some controversies in the past, with Bitcoin Cash proponent Hayden Otto claiming that RBFs allowed for Bitcoin double-spends back in 2019. In contrast, Bitcoin Cash has removed the feature and claimed that unconfirmed transactions sent on that network are final and secure to accept.
Still, with the way blockchains function, RBF-like transactions were confirmed to occasionally occur on Bitcoin Cash either way. This is because RBF is just an implied property of a Bitcoin-like consensus mechanism that was formalized as a feature.
