Users can send cryptocurrencies virtually anywhere globally using the blockchains on which they are based. However, there are fees associated with sending crypto assets. Transactions can take longer for certain assets, depending on the associated blockchains. Certain crypto wallets and platforms offer users the option to choose a transaction fee. Higher fees usually result in faster transactions.
However, over the years, some wealth holders have entered their coin or token values in the wrong fields, resulting in exorbitant, if random, fee payments. For example, a holder might intend to send 12 Bitcoin (BTC) for a fee of 0.01 BTC, although they may inadvertently put 12 BTC in the fee box and spend 12 BTC on fees while only delivering 0.01 BTC to the intended destination sends.
A number of fee mismatches have occurred with Ether (ETH) and Bitcoin. Here are a few painful fee histories.
Enough Ether to pay out $ 1,000 a day for a year
In February 2019, an industry participant incorrectly paid a total of 2,730 ETH for fees as part of three Ethereum-based transactions. In the triad of transactions, the sender paid fees of 420, 210 and 2,100 ETH. According to ETH data at the time of reporting in March 2019, the transaction costs were around USD 365,800.
Fortunately, that sender got goodwill from SparkPool, the mining pool at the other end of the transaction. “Many thanks to SparkPool and your miners for helping us to make up for our loss,” stated the accidental ETH transactor as part of a blockchain message. “We are ready to share half of 2100 ETH with the miners to thank the miners’ integrity,” added the Transaktor.
Ether is valued at $ 1,850 per coin at the time of publication, making this event worth a little over $ 5 million overall.
A fee saga with millions
In the summer of 2020, three Ethereum transactions surfaced that incurred combined fees of more than $ 5 million, based on ETH prices at the time. Someone sent 0.55 ETH in one transaction on June 10, 2020, worth a total of $ 134, and spent a whopping $ 2.6 million worth of ETH on gas – an industry term for the funds used for transactions on the Ethereum network were paid.
After the multi-million dollar fee event, two more transactions surfaced. One saw another $ 2.6 million paid to ship 350 ETH. The other transferred 3,221 ETH, which is roughly the same amount for gas – 2,310 ETH to be precise. All three steps took place between June 10 and 11, 2020.
However, this saga may not have been the sum of several mistakes. Subsequent reporting revealed that the third transaction – the transaction that cost ETH 2,310 to move ETH 3,221 – was the result of a “malicious attack” involving a victim’s wallet.
The pair of multi-million dollar gas transfers leaves no conclusive explanation, although theories included simple user errors, blackmail efforts related to hackers, and a suspected Ponzi scheme that is losing money. In today’s market, however, the three transactions are valued at over $ 43.6 million.
DeFi comes with risks
The decentralized financial boom of 2020 brought with it stories of substantial profits, but also at least one case of fee turbulence. DeFi kicked off as another likely bubble in the crypto industry that was accompanied by soaring prices, suspicious project activity, and other drama. The DeFi sector, which is largely based on Ethereum’s blockchain, saw high transaction fees.
Despite the high fees, a user paid way too much to send one of their trades through Uniswap, a popular exchange in the DeFi niche. As reported in November 2020, this trader accidentally typed his amounts of gas in the wrong places on his MetaMask wallet and pushed through a $ 120 trade while spending $ 9,500 on gasoline.
“I thought things like that happened to others, but I was wrong,” said the trader on Reddit.
“Metamask did not fill out the gas limit field with the correct amount in my previous transaction and this transaction failed, so I decided to manually change it on the next transaction,” he explained. “But instead of putting 200,000 in the ‘Gas Limit’ input field, I wrote it in the ‘Gas Price’ input field, so I paid 200,000 GWEI for this transaction and ruined my life.”
Bitcoin transactions are usually not that expensive
Although several Ethereum fee issues have been encountered, crypto participants have also suffered from Bitcoin fee issues. A particularly painful transaction surfaced on Bitcoin’s blockchain in December 2020. The transaction shows that roughly 3.49 BTC was paid to send just 0.00005 BTC – a fee many times higher than what would have been required to send that amount of Bitcoin.
Based on TradingView data, the price of Bitcoin fluctuated between approximately $ 22,765 and $ 24,205 on December 19, the day of the transaction, so the fee was at least $ 79,000 at the time. At the time of publication, such a transaction is currently valued at approximately $ 170,000.
A seemingly similar transaction hit Bitcoin’s blockchain on November 18, 2020, revealing about 2.66 BTC spent on transfer fees of about 0.01 BTC. Based on Bitcoin’s price range for Nov. 18, the sender spent at least $ 45,000 to transfer a comparatively paltry amount of the asset. That fee is now worth around $ 130,000.
Many of those stories about transaction fees were likely mistakes. Caution is advised with crypto. Noise and distraction can sometimes lead to costly mistakes. Education is also important. Lack of knowledge of crypto wallets, transactions, and assets can have detrimental consequences when sending funds.