Bitcoin User Pays Record-breaking $3 Million Transaction Fee in Costly Error
In a costly Bitcoin mishap, a user mistakenly paid a record-breaking $3 million transaction fee, a whopping amount even in light of the recent surge in Bitcoin transaction fees and mining difficulty.
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In possibly one of the most costly mistakes ever, a Bitcoin user paid over $3 million in fees to process a single transaction on the network. It is the highest fee for one transaction.
According to Blockchain data, the user wanted to send 139.42 BTC worth about $5.1 million. But 83.64 BTC was consumed as transaction fees, leaving the recipient with only 55.77 BTC, around $2 million—the incident on November 23.
While unclear what could have led to the incident, the consensus is that it resulted from the sender's mistake. Bitcoin miner AntPool processed block 818087 containing the transaction, and it was a windfall for the miner, who also received the 6.25 BTC reward for processing the block. On-chain data revealed that the wallet had been created only minutes before the transaction, making it challenging to identify its initiator.
This is not the first time a costly mistake has happened on the Bitcoin network. Paxos spent $500,000 to process a transaction worth $2000 in September due to a fat finger error. Fortunately for the firm, F2Pool, which processed the transaction, agreed to refund the money. There has yet to be a report of AntPool making a similar effort.
Bitcoin Network Fees On The Rise
While paying $3.1 million for a transaction is merely a mistake, the transaction fees on the Bitcoin network have been increasing recently due to Ordinal's activity. The average fee reached as high as $18.67 on November 16. On the day of the incident, the fee was approximately $10.51, but it has now dropped to $5.28. This decrease coincides with a slight decline in Ordinals activity.
As of now, miners have earned more than $118 million in fees from processing over 44 million Ordinals inscriptions. Although Ordinals activity has increased network fees, it has also allowed miners to diversify their income. So, the miners are not complaining even if users are.
Bitcoin Hash Rate and Difficulty Surge
Meanwhile, the Bitcoin network has also seen a massive jump in its hashrate and difficulty. Glassnode data shows that it increased for the sixth consecutive time, taking the mining difficulty to more than 68 trillion. This represents a 5% rise from the last difficulty, 23% higher than the previous two months. High difficulty generally means mining for Bitcoin is more challenging. This likely contributed to the increase in fees.
The rise in mining difficulty is primarily due to the surging hash rate. Bitcoin hash rate is the amount of computing power on the network and generally indicates miner participation. The hash rate saw its most considerable daily increase on November 19, and the seven-day MA peaked at 507 exahash per second on November 25.
