Bitcoin User Pays Record $500,000 Fee For Single Transaction — Jameson Lopp Points To Withdraw-Only Wallet

A Bitcoin BTC/USD user on Sunday paid an astonishing transaction fee of 19 BTC, equivalent to a staggering $509,563. 

What Happened: According to Jameson Lopp, a prominent figure in the cryptocurrency community, the address involved in the transaction is likely a withdraw-only hot wallet tied to an enterprise. 

"It looks like it only receives deposits from one address to top up its balance every now and then. Spending pattern is one long peel chain! They’ve received 60,000+ transactions and sent 60,000+ transactions from the same address (bad practice) and likely calculated their change output incorrectly," he said.

The address in question that made the fee calculation error has the characteristics of a withdraw-only hot wallet from an enterprise. It looks like it only receives deposits from one address to top up its balance every now and then.

Spending pattern is one long peel chain! pic.twitter.com/V8ApvWvRR3

— Jameson Lopp (@lopp) September 10, 2023

Another BTC proponent Seth Michael Steele said it was likely a user-end mistake. "I think it's important to keep in mind that block space's value is critical to the well being of the network in the long run, as it increases miner compensation and therefore security, specifically in times of high transaction demand."

Simple.

The average #Bitcoin transaction fee is currently ~5,315 sats ($1.41).

A person opting to pay 19 #BTC ($509,536) for their transaction is certainly an outlier, not to be mistaken for a necessary action, and not to be taken as an indication of the overall functionality of the… pic.twitter.com/JaCu4gB162

— Seth Michael Steele (@s_michaelsteele) September 10, 2023

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Why It Matters:  The current average Bitcoin transaction fee stands at around $1.410.

It is important to consider that average fees can vary due to network congestion. During the 2017 cryptocurrency boom, fees surged to nearly $60. However, the recent fee of 19 BTC paid by the Bitcoin user surpasses any previously observed outliers.

Price Action: At the time of writing, BTC was trading at $25,737, down 0.42% in the last 24 hours, according to Benzinga Pro.

Photo by Oier Aso on Shutterstock

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