Topic: [SHOCK] A Mysterious $194k Fees On A Single Bitcoin Transactions (Read 365 times)

The difficulty is adjusted so that blocks will be found, on average, once every 10 minutes, or once every 600 seconds. This means the chances of a block being found in any given 6 second period is 1%.

If there is a 1% chance of loss, and the amount of the loss would be $400k, as long as the pool stands to gain an amount greater than $4k, the expected value of doing this is positive.

I don't know how you came up with 1% chance but it doesn't seem right.
In any case the risk of doing this is that someone else could find the same block in that delay time and broadcast it to the network where everyone else starts working based on that block. Result of this is losing nearly $400k, in other words the cost is just too high that doesn't justify the act.

Fascinating, based from the address' history, it tends to send small amounts from time to time but with change that sends the rest back to itself.
Someone must have messed up coin control or the manually generated txn

It's not about the typical ridiculous fee due to the "congestion" simply because it's impossible to reach that fee with "wrong estimation" for a '1in-1out txn'.
The transaction was obviously created without a change (by accident or with reason) so all of the excess amount were considered as "mining fee".

This is not guaranteed to determine if a transaction was not broadcast prior to being included in a block.

Someone could mine block n at timestamp x that includes a previously unbroadcast transaction, broadcast said transaction at timestamp x, and broadcast block n at timestamp x + 6 seconds. This would put the chances of another pool including the transaction in another block at around 1%. This chance could be reduced by the delay in broadcasting the block is reduced.

A pool could also broadcast a found block only to a select number of other mining pools, and broadcast the transaction at the same time, but via many very well-connected nodes.

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As for the 1st scenario, a poll could charge a 10% fee for including this transaction, and refunding the transaction fee, and could still offer this service profitably if they don't end up being the one confirming the transaction 1% of the time.

I'm sure some already do. But yeah, so there is no way for us to discover whether or not that transaction was broadcast only using retrospective data from publicly available block explorers.

As above, there are block explorers which record the time that they received a transaction as opposed to only recording the timestamp of the block it is included in. Are there any block explorers which do the same thing with blocks, recording the time that they received a block as opposed to only recording the timestamp of the block? If there were, then the combination of the time the transaction was first seen and the time the block was first seen could be enough to deduce if the transaction was broadcast prior to being mined.

Still, for such a niche case as this, it's not exactly high up on the priority list.

The only reliable way is to run a modified full node that first removes the limit on its mempool size and also has a good connectivity to the rest of the nodes and is running for more than a day. Then that node would mark transactions that aren't in its mempool but are in a block so that they can be analyzed. These transactions could include the payment of the pool to its miners which they don't broadcast (and usually has a zero fee) but also these shady looking transactions.
This is something a blockchain analysis company could do.

Less experienced people or people who dont know how to make use of the Bitcoin transaction estimator site will always pay ridiculous transaction fees when the network is in a congestion state.
Don't be surprised more are still coming or have already happened which we don't know.

Have a read of my post above: https://bitcointalksearch.org/topic/m.56395036

If it was an accidental error, then it is highly unlikely that the transaction came from any mainstream wallet, but rather someone trying to create a transaction manually or test a new piece of software. The way bitcoin transaction work is that you don't actually specify a fee. You specify which inputs you want to spend, and you specify which addresses you would like to pay and how much bitcoin you are going to send to each address. The difference between the total of all the inputs you specify and the total of all the outputs you specify becomes the fee. At no point do you say "I want to pay 5000 sats as a fee" or "Set the fee rate to 10 sats/vbyte" or anything like that at a protocol level. Every wallet which has a fee slider or similar mechanism is actually subtracting the fee you set from the change output (or payment output if there isn't a change output).

What has most likely happened is that someone created a transaction saying "I want to send 5000 sats to this address", meanwhile forgetting what I have just explained above. They meant to only send 5000 sats to one address, but by failing to specify a destination (such as a change address) for all the remaining coins which had been included, they were automatically added to the fee.

I don't understand at what point these errors occur and it amazes me because, from my experience with electrum bitcoin wallet, transaction are automated as well as manual but then, its often automated by default so, should you be inexperienced, your very unlikely not to be aware of the transfer fee settings not to talk of selecting between manual and auto fee settings.

Again, transactions to be added to the mempool is always charged based on the bytes they occupy and as such, a multiple of sat/byte gives the total. So, at what point do this error of paying over $194k for just 0.00005btc do occur? As in, for a complete numb, isn't the sat/byte enough to mitigate against that or for a professional, isn't he or she conscious of what he or she is typing?
I don't seem to get it, at what point do this error do occur?

Well, it could actually be an error or there is more to it which is based on the possibility of a compromised miner's identity (Being an insider kind of thing)
So i don't know to what extent this is a error and allowed to confirm without complaint on refund!

In the case of btc.com, it appears they actually pay a fixed amount based on how many shares a miner submits to the pool, so the pool's actual earnings wont actually affect how much the miners receive. I think it would also be fairly trivial for a pool to reflect that there is more mining capacity mining on the pool than is actually the case.

I do think you are right though that this is not an instance of laundering coin.

Yeah, as I said above, this would require collusion of a number of individuals, from the person attempting to launder money at the bottom, right up to the multiple people holding private keys to BTC.com's mining pool's receiving addresses for block rewards and fees. They would all need to work together to redirect the large fee back to the individual in question rather than split it up between all the miners mining on the pool based on their proportional amount of work. If at any point the miners mining on that pool discovered that they had been taken advantage of to launder someone else's money at no gain for themselves, then the majority would rightly leave the pool and mine elsewhere. Even if we assume that the individual in question is willing to pay a massive 50% of the fee to BTC.com and only keep 50% for himself, BTC.com would be risking their entire reputation and their future existence for less than 2 BTC. I doubt very much that is what happened.

A mining pool can not be a mixer, there are many miners under a single mining pool, and the mining reward is shared among them according to their mining hashrate. In this case, the person that pay high transaction fee, if among the miners, he will only be given a share of the fee while he lose the rest, while mixer makes you get 100% of your bitcoin after the fee has been deducted.

If this was in fact money laundering, I would think it would be more likely for the sender to include the large transaction fee, and subsequently, get reimbursed the large tx fee, minus a percentage to an unrelated address. The pool would, in effect be acting as a mixer.

https://bitcointalksearch.org/topic/m.54660909
I tracked similar transactions on the Ethereum network and here you can see the solutions of the pools 2 pools out of three divided the commission between the miners.
Tight commissions can be the result of a mistake or a hacker attack on the service's payment gateway.
I don't think it was a money laundering scheme.

Well, I was one of those suckers.... when I chose "Max Fees" on the wallet I used, because I was in a hurry and after the tx confirmed I only realized that I paid $1000 in fees. I have to say one thing, I learned a very expensive lesson with this and it will never happen again.

I have no regrets... because I used some of the money to buy a once in a lifetime experience that I would never have had the opportunity to repeat again. 

Sometimes you have to make mistakes to learn from them, but this person most probably was on the receiving side of this... or the receiver was someone he knew. (Miner to Miner) 

This happened on the Ethereum blockchain before, and it was a whopping 2.6 million dollars... for a mere $130. Those fat fingers!

And I doubt that poor sod managed to get his funds back, as the miners would be more than happy to cashout on their heyday.

Source: https://www.forbes.com/sites/nickchong/2020/06/11/not-again-unknown-ethereum-user-pays-a-26-million-transaction-fee-for-the-second-time/?sh=1e65535d3d08

This is a good point. Now that you mention it, there are some block explorers which keep a log of the time they first saw each transaction. For example:

https://www.blockchain.com/btc/tx/33291156ab79e9b4a1019b618b0acfa18cbdf8fa6b71c43a9eed62a849b86f9a
https://live.blockcypher.com/btc/tx/33291156ab79e9b4a1019b618b0acfa18cbdf8fa6b71c43a9eed62a849b86f9a/

Both of these list the received time as 14:13, whereas the transaction was included in block 662,052 which has a timestamp of 14:15. This would suggest the transaction was broadcast normally, but as we know, block timestamps are not necessarily accurate, and can vary within a range of a few hours.

Is there any way to tell for sure whether this transaction was mined in secret or was broadcast to the network prior to being mined?

The screenshot you posted says the transaction has more than 9k confirmation which means it wasn't in the mempool when you saw it. In fact this is from 2 months ago.
I say this because it would have been possible to answer your next question about "possible money laundry"  with certainty if this were in mempool because such transactions aren't broadcast to other nodes, instead the person sending the tx and miner do it privately because they would want THAT miner to pick it up not someone else.

So if you see the tx in mempool then it is most likely a mistake but if it weren't then it is definitely something shady, whether money laundry or bribing the miners maybe even for spam attack.

Similar things have happened before either due to user errors or because of script bugs. I wrote about a similar transaction a few months ago. In that particular case from 2015, there was a bug that caused one user to pay over 85 BTC in fees. AntPool mined the block, so the user got in touch with their support and when they realized what happened, they returned the whole amount back to the original address.

This is the entire story.

I'm not so sure. The block was mined by BTC.com, which is a large pool made up of hundreds, if not thousands, of individual miners. Regardless of which individual miner mined the block which contained that transaction, the fee would have gone to BTC.com and then been split up between all their miners based on proportional amounts of work. Either there would have needed to be collusion at all levels, with BTC.com risking their reputation for little to no gain, or the person attempting to launder these coins would have lost 99% of them to other miners. The laundering idea only really makes sense if it is a single entity which mines the block.

Much easier to just mix or coinjoin the coins or trade them back and forth to Monero.

No, not all wallets. There are plenty which will let you set ridiculous fees without a warning, but as I said above, this looks very much like a manually created transaction gone wrong.

Most wallet started to give warning when the fee we are using is high than our transaction amount and as an electrum user I noticed this but this warning feature available in all the wallets? Like qt and hardware wallet?

 
This is exactly what I'm thinking because when I checked the input address and the output address I can bodly say that it was an act of money laundering, the transaction fee was included in their own block to claim a clean and safe money. The input address is an expert with over 14k transactions so I don't see this as any mistake.

Through his 14k transaction the $2 transaction is the least among all the transactions. I believe he knew what his was doing from the onset.

The 0.0005BTC was the highest the receiver address ever received and few days later the amount was transfer to another large address.

There was a thread about this transaction made at the time, where I discussed what has likely happened here: Think twice before pressing send. It is almost certainly a mistake from someone who really should have been testing whatever they were testing on testnet.


I have seen nothing from BTC.com or crypto news sites in the last few months to suggest that the sender has attempted to recover this fee, however.

Traceable, sure, but it could still be used to launder money. I pay a fee of 3 BTC for a transaction, include the transaction in my own block, then claim the fee as a nice, clean "mining reward".

No, it is a mistake.

No, the error is from the user, no transaction is untreceable as the bitcoin blockchain is transparent.

Yes, you can use blockchain explorer to know the block which the transaction is included, and the miner that mined the block.

There are few cases in the past while the mining pool that mined such transaction with high fee returned the bitcoin. The miners would have known it is a mistake.

Most likely, the sender made a mistake in creating their transaction. It is possible the person who sent the transaction was intending on recovering the excess tx fee from btc.com, but IMO this is unlikely because it would rely upon goodwill from whichever pool mined the transaction. 

I was on my daily research routine when I stumbled on this crazy transaction on the mempool, A sender with the address below sent 0.00005BTC ($2.7) to a random wallet with a transfer fee of 3.49BTC ($194k) . Could this be some kind of money laundering? Seemed like the miners or whoever behind it knew they were going to mine that particular block and decided to insert such amount of fees to make the transaction untraceable for life?

• Is there a way someone can tell which miner or what address confirmed transactions??
• Is this some kind of silk road activities?
• Okay let's act nut for a few seconds and pretended that the fee was inserted by mistake, is there any way to recover it? ( sounds stupid? yeah )

 The sender has made over 14,124 transactions with
over 19k bitcoins been traded.


Transactions harsh

Sender address

Receiver address