Take a look at a few crypto transactions that came with unnecessarily high fees.
Users can send cryptocurrencies virtually anywhere globally via the blockchains on which they are based. By sending crypto assets, however, fees are incurred. Transactions may take longer for certain assets, depending on their related blockchains. Certain crypto wallets and platforms give users the option to choose a transaction fee. Higher fees typically result in faster transactions.
Over the years, however, some asset holders have put their coin or token values into the wrong fields, resulting in exorbitant, albeit accidental, fee payments. For example, a holder might intend to send 12 Bitcoin (BTC) at a fee of 0.01 BTC, although they might accidentally put 12 BTC into the fee box, spending 12 BTC on fees while sending just 0.01 BTC to the intended destination.
A number of fee mishaps have occurred involving Ether (ETH) and Bitcoin. Here are a few painful fee stories.
Enough Ether to pay out $1,000 per day for a year
In February 2019, one industry participant mistakenly paid a grand sum of 2,730 ETH for fees as part of three Ethereum-based transactions. The sender paid fees of 420, 210 and 2,100 ETH in the triad of transactions. According to ETH prices at the time of reporting in March 2019, the transaction costs totaled approximately $365,800.
Fortunately, this sender received an act of good will from SparkPool, the mining pool on the other end of the transaction. “Thank you SparkPool and your miners for helping us to recover our loss,” the accidental ETH transactor noted as part of a blockchain message. “We are willing to share half of 2100 ETH with the miners to thanks the miners’ integrity,” the transactor added.
Ether is now valued at $1,850 per coin at the time of publication, making this event worth just over $5 million in total.
A fee saga involving millions
In the summer of 2020, three Ethereum transactions surfaced, incurring more than $5 million worth of total combined fees, based on ETH prices at the time. Someone sent 0.55 ETH, valued near $134 total back then, in a transaction on June 10, 2020, spending a whopping $2.6 million worth of ETH on gas — an industry term for the funds paid for transactions on Ethereum’s network.
Following the multi-million-dollar fee event, two more hefty transactions surfaced. One saw another $2.6 million paid to send 350 ETH. The other transferred 3,221 ETH, tallying close to the same amount for gas — 2,310 ETH to be exact. All three moves occurred between June 10 and 11, 2020.
This saga may not have been the summation of a few mistakes, however. Subsequent reporting revealed the third transaction — the one costing 2,310 ETH to move 3,221 ETH — was the result of a “malicious attack” involving a victim’s wallet.
The pair of multi-million-dollar gas transfers remain without conclusive explanation, although theories have included simple user error, hacker-related blackmail efforts, and a suspected Ponzi scheme losing money. However, in today’s market, the three transactions are worth over $43.6 million.
DeFi comes with risks
The decentralized finance boom of 2020 came with stories of significant profit, but also at least one instance of fee turmoil. DeFi took off as another likely crypto industry bubble, complete with surging prices, suspicious project activity and other drama. Largely based on Ethereum’s blockchain, the DeFi sector began seeing high transaction fees.
Even given the high fees, however, one user paid far too much to send one of his trades through on Uniswap, a popular exchange in the DeFi niche. As reported in November 2020, this trader accidentally typed his gas amounts in the wrong places on his MetaMask wallet, pushing through a $120 trade while spending $9,500 on gas.
“I thought that this kind of things happen to others, but I was wrong,” the trader said on Reddit.
“Metamask didn’t populate the ‘Gas Limit’ field with the correct amount in my previous transaction and that transaction failed, so I decided to change it manually in the next transaction,” he explained. “But instead of typing 200000 in ‘Gas Limit’ input field, I wrote it on the ‘Gas Price’ input field, so I payed 200000 GWEI for this transaction and destroyed my life.”
Bitcoin transactions aren’t usually that expensive
Although multiple Ethereum fee bumbles have arisen, crypto participants have also suffered Bitcoin fee woes. One particular painful transaction surfaced on Bitcoin’s blockchain in December 2020. The transaction shows about 3.49 BTC paid to send just 0.00005 BTC — a fee multitudes higher than would have been necessary to send that amount of Bitcoin.
Based on TradingView data, Bitcoin’s price fluctuated between roughly $22,765 and $24,205 on Dec. 19, the day of the transaction, making the fee worth at least $79,000 back then. At the time of publication, such a transaction currently values approximately $170,000.
A seemingly similar transaction hit Bitcoin’s blockchain on Nov. 18, 2020, revealing about 2.66 BTC spent on fees for the transfer of roughly 0.01 BTC. Based on Bitcoin’s price range for Nov. 18, the sender spent at least $45,000 to transfer a comparatively paltry sum of the asset. This fee is now worth around $130,000.
Many of these transaction fee tales were likely mistakes. In crypto, taking caution is important. Rushing and distraction can sometimes lead to costly mistakes. Education is also vital. Lack of knowledge on crypto wallets, transactions and assets can yield harmful consequences when sending funds.