A Cryptocurrency User Paid $2.6M In Transaction Fee To Send $136 — Twice

An anonymous user paid approximately $2.6 million in transaction fee to transact small amounts of money in the Ethereum (ETH) cryptocurrency two times over the last 24 hours at press time.

What Happened

The first transaction of 0.55 ETH, or $136.26, according to ETH's price at press time, was made at 5:47 am on Wednesday, according to data from Etherscan.

To make this transaction, the user paid 10,668.73 ETH, or $2.6 million, in "gas," as the transaction fee at the Ethereum network is called. A similar transaction was repeated at 11:30 PM later in the day. This time 350 ETH, or $86,712.5, were transferred for the exact same fees.

Why It Matters

Gas is charged by miners on the Ethereum blockchain network based on the amount of computing it takes to verify a transaction. If the users agree to pay a higher gas price, the transaction becomes more lucrative to miners and is completed rapidly.

ETH Gas Station recommends paying $0.155 for a standard transaction that can take up to five minutes and $0.2 for a fast transaction that will be expected to complete in less than two minutes.

Paying $2.6 million for a transaction is extremely unusual and doesn't make operational sense, giving rise to speculation of accidental error, money laundering, or a technical glitch.

Some cryptocurrency community members on Twitter suggested that the transaction was more likely to be a technical error since the ETH transaction fee in both cases was exactly the same, which would be extremely unlikely to be an accident.

What's Next

The transactions on blockchain can't be reverted, but the mining pool which verified the transaction can choose to return the money to the original owner by creating a new transaction. The first transaction was approved by Chinese mining pool "Spark Pool," and the second by "Ethermine."

Today our Ethermine ETH pool mined a transaction with a ~10.000 ETH fee (https://t.co/B5gRWOrcPf). We believe that this was an accident and in order to resolve this issue the tx sender should contact us at via DM or our support portal at https://t.co/JgwX4tGYr4 immediately! pic.twitter.com/sWxVRx5muv

— Bitfly (@etherchain_org) June 11, 2020

Sparkpool said in a statement that it "has had the experience of handling similar issues properly. There will be a solution in the end."

Price Action

Ethereum traded 1.2% higher at $247.75 at press time on Thursday. The apex cryptocurrency Bitcoin (BTC) was up 1.1% at $9,873.64.