Someone lost $170,000 in BTC trading fees

One lucky Bitcoin miner has made another lucrative profit thanks to an unusually high payout by one of the network's users.

Blockchain data shows that an anonymous user paid a transaction fee of 4 BTC ($172,000) on Tuesday, reducing the amount needed to process the transfer.

A costly blockchain mistake

According to mempool.space, the transaction itself sent only 2.9 BTC to the intended recipient, meaning the associated fee was more than 133% of the transaction amount.

By the site's metrics, the transaction was multiplied by 29,992x. Specifically, the user paid 1,800,890 satoshis per vByte (sat/vB) – a measure for calculating the demand for Bitcoin block space at a given time. For that block, a normal transaction would only pay approximately 60 sat/vB.

“When you're fortifying UTXOs, make sure you're fortifying them instead of turning one into a payment,” Swan Bitcoin editor-in-chief Tomer Strollite said in a post to X.

UTXO stands for Unpaid Transaction Output, which means that an individual BTC transfer is stored separately in a user's Bitcoin wallet. These transfers can be thought of as chunks of Bitcoin that the user controls: some chunks are bigger than others (consisting of more BTC) and all the chunks added together form the user's wallet balance.

In general, it's best to avoid splitting one's BTC into many smaller UTXOs – especially for economic reasons. Later, when sending large amounts of BTC, the user must pay a fee on each UTXO that is moved, which means that the more there are, the more expensive the transaction will be.

On-chain data suggests that the high-paying user was attempting to merge his own UTXO to avoid this problem – a method of merging many small tokens into a larger one. Days earlier, the same user had received two Bitcoin transactions worth 2.9 BTC and 4.03 BTC each — the same values ​​as Tuesday's transfer and payment, respectively.

Will the user return bitcoins?

Although Bitcoin transactions and payments are technically irreversible, the overflow transfers are often paid by the miners who receive them.

For example, in September, Bitcoin mining pool F2Pool returned the money to Paxus after it accidentally paid $500,000 for a Bitcoin transaction.

Months later, mining pool giant Antpool paid out a record-breaking $3.1 million payout to miners for an anonymous user.