Bitcoin Transaction Fee: Paying $500,000 for a $200 Transfer

A cryptocurrency participant made headlines in the Bitcoin and cryptocurrency world by accidentally paying a transaction fee of approximately 20 BTC ($500,000) to transfer only 0.074 BTC ($200), setting a record for the highest transaction fee ever paid in US dollars for a single Bitcoin transaction.

Jameson Lopp, the CTO of Casa, highlighted that the wallet address that made the transaction belonged to an experienced Bitcoin investor who had executed over 120,000 transactions. Lopp stated on the social media platform X, “A few hours ago, it appears that there was a cryptocurrency exchange or payment processor with faulty software behind the transaction that paid a fee of approximately 20 BTC ($500,000).”

The transaction took place on September 10 at 05:10 UTC. While a cryptocurrency exchange sent BTC worth $1,700 to the wallet address, four payments totaling approximately $200 were made. The paid transaction fee was 19.89 BTC. According to on-chain data, the wallet address was created in June and is still active.

Three Days Given for Refunding the Transaction Fee

The transaction fee went to the Bitcoin mining pool F2Pool, which mined the block containing the transaction. Chun Wang, the co-founder and manager of F2Pool, stated that the 20 BTC will be held for three days in case the person or persons behind the transaction request a refund. If no request is received during this time, the transaction fee will be transferred to the Bitcoin miners’ pool.

Throughout Bitcoin’s history, several high transaction fees have been paid. According to Blockchair, in 2016, a person paid $134,000 as a transaction fee during a Bitcoin transaction. There are 24 Bitcoin transaction fee payments exceeding $20,000 and 233 Bitcoin transaction fee payments exceeding $10,000.

Bitcoin users have the freedom to pay any amount they want for their transactions. If the transaction fee is too low, miners may not accept it, while a high fee ensures immediate execution of the transaction. The average transaction fees on the Bitcoin network are usually around $1 or $2, but during periods of high transaction volume, fees can go up to $60.