Why do some people pay illogically high fees for transactions? - page 2.

Synchronice

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Quote from: Charles-Tim on May 01, 2023, 03:22:00 AM

Those transactions do not look like transaction send from exchanges that the withdrawal fees are very high. The sender mighty have made a mistake and used too high fee. There are some people in the past that mistakenly used too high fee. If it is because of a reason, I think the senders will be the one that can best answer the reason.

One can make a mistake for one time but for multiple times? If you dig into Transaction^[3] and see his other transactions between other wallets, you'll clearly see that the owner always sends/receives transactions with 1,012 sat/vB.

Quote from: Charles-Tim on May 01, 2023, 03:29:12 AM

Quote from: Little Mouse on May 01, 2023, 03:22:24 AM

Or they are using a wallet which estimates the wrong fee

I have used some wallets that estimate fee wrongly. Even most wallets do that. There are times I will check the mempool and check the reputed wallets, there will be difference in fee estimation at times, but just little differences. What I know is that even as the wallets estimates fee wrongly, the wallet do not include fee very high like that. Likely not because of bitcoin wallet fee estimation algorithm.

There is a difference between actual withdrawal fees and Electrum fees, sometimes Electrum shows higher fees, sometimes it shows normal or sometimes even slightly lower than recommended. But the difference is never as high as 10x and more.

Quote from: DaveF on May 01, 2023, 11:24:46 AM

This has been brought up a few times and the same answers keep coming around. Mistakes, CPFP, Exchanges, people who absolutely want to be in the next block.
What I don't see mentioned a lot of the time is old bad software.

There are a lot of things out there running code that worked in 2014 and still works today in 2023 and back then BTC was at such a low price fees really did not matter so they hard coded in a large number and called it a day. This way the programmer did not have to sit there and worry about figuring out what fee had to be paid by looking at the mempool and doing whatever. It just worked. Close to a decade later, it's still running the same code paying the same fees because nobody has changed anything.

-Dave

If you have a look at transactions, you can clearly see that all of them are done from SegWit addresses and SegWit was activated on 1st August, 2017, so, this should not be an issue because transaction fees become a problem since 2016 as far as I know.

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Quote from: Synchronice on May 01, 2023, 03:15:14 AM

Look at this Transaction^[1]. It paid 15x more than it was necessary to get confirmation. It paid $38.77 in fees for transaction that worth $180. If you have a look at old transactions of this wallet, it was always paying optimal fees.
I don't really know what happened there, while it paid 5x more than recommended, actually $10.56 was spent in fees while transacted amount was $1.41, check: Transaction^[2]
And here - Transaction^[3], someone even paid 56x more.

Is this done on purpose by some miners to increase the overall transaction fees and collect more fees?

Edit: I had to open this thread on Bitcoin Technical Support board, sorry Undecided

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I guess the reason is time. Some need their transaction to process faster and they just click "Include in the next block" button in their wallet without checking the fee. And with the mempool we witness today that can get expensive. But then again, time is money and if you have to transfer funds today you don''t care how much you'll have to pay in fees. Ordinals: people are paying huge fees because of some assholes and their monkey pics.... Grin

m2017

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The reason for the illogically high transaction fees, I think, is primarily due to the human factor. Someone by mistake, someone in a hurry indicated an overestimated value, as a result we see those x15-x56. Perhaps someone, in the hope that this will speed up the transaction, put up a big commission. It seems to me that the reason also lies in the lack of relevant knowledge among people. Many newcomers, tritely, may not know that commissions can be chosen and use the default settings set in bitcoin wallets.

If you monitor https://mempool.space/, you can find a lot of transactions with overpaid commissions.

You can use similar websites to select logically transaction fees - http://bitcoinfees.earn.com/

pooya87

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There are also some fee estimators that return wrong high fee rates whether because they have a broken implementation or they are maliciously trying to inflate the fee rate such as the https://bitcoinfees.earn.com/ website which could be the reason why someone would pay very high fees (like the 5x and 15x cases).

BlackHatCoiner

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Because:

- bad software exists.
- exchanges are bad software.
- people make mistakes when setting fee rate.
- closing a lightning channel non-cooperatively requires to make a broad estimation of the fee rate, and is entirely possible to be completely inaccurate when closing transaction is broadcasted.

DaveF

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This has been brought up a few times and the same answers keep coming around. Mistakes, CPFP, Exchanges, people who absolutely want to be in the next block.
What I don't see mentioned a lot of the time is old bad software.

There are a lot of things out there running code that worked in 2014 and still works today in 2023 and back then BTC was at such a low price fees really did not matter so they hard coded in a large number and called it a day. This way the programmer did not have to sit there and worry about figuring out what fee had to be paid by looking at the mempool and doing whatever. It just worked. Close to a decade later, it's still running the same code paying the same fees because nobody has changed anything.

-Dave

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Quote from: nc50lc on May 01, 2023, 04:43:35 AM

Quote from: Synchronice on May 01, 2023, 03:15:14 AM

-snip-

Some of cases like this are CPFP (Child-Pays-For-Parent) transaction.
Being mined at the same block and the child transaction having higher fee rate the parent indicated that it's that kind of transaction.
...
However, none of the transactions in the OP are CPFP.

I think we have an example in the forum today of what you are talking about.

Quote from: nutildah on May 01, 2023, 09:20:02 AM

Quote from: ?? on ??

Friends, thank you all for a great week / 2nd week payment sent. ^{[exchange rate: 28502]}

Please feel free to join the discussion and testing of the platform. Wink

Thanks.

And I don't mean to clutter the thread but I bit the bullet and made a tx with a 138 sat/byte fee to hopefully encourage a miner to pick up the payment transaction Cheesy

Cheers to all, have a great week.

SamReomo

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I think the sender might have set higher fees intentionally to receive the transaction at very fast speeds. Sometimes the senders think that setting way higher fees then the recommend fees increases the transaction speed to way higher levels and if they want urgent transaction then 2x to 4x the fees to increase the speed of transactions.

Another theory regarding those transactions can be that the sender has set the fee unintentionally and executed the transaction. Such people are so confused and busy in their lives that it's sometimes hard from them to focus on things properly. Once the transaction fees is set and executed then they can't undo the transaction.

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Quote from: Synchronice on May 01, 2023, 03:15:14 AM

Is this done on purpose by some miners to increase the overall transaction fees and collect more fees?.

Unless these fees are unreasonable, such as some cases in which the user made a mistake by reflecting the value of the transaction and fees An unknown transferer has just paid around $47K in fees to make a $194 Bitcoin transaction. Oops!, the possibilities are many.

Some factors due to user ignorance:
Using old addresses as Legacy (P2PKH) address, using a wallet that has poor programming or doesn't allow you to adjust fees.

Some compulsory factors:
Wants the transaction in the next block.
RBF or CPFP (Child-Pays-For-Parent) transaction.

In very rare cases, paying extremely high fees may be a method of money laundering or tax evasion.

nc50lc

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Quote from: Synchronice on May 01, 2023, 03:15:14 AM

-snip-

Some of cases like this are CPFP (Child-Pays-For-Parent) transaction.
Being mined at the same block and the child transaction having higher fee rate the parent indicated that it's that kind of transaction.

For those who are not familiar with CPFP, it's kind of a transaction bumping technique which spends the output of an unconfirmed transaction with higher fee to "bundle" their total fee and size together.
Essentially increasing the overall fee rate of the parent and child transactions.

However, none of the transactions in the OP are CPFP.
If not (un)intentionally set, those are probably "premium withdrawals" from a centralized exchange, wallet or casino.

BitcoinGirl.Club

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Quote from: Synchronice on May 01, 2023, 03:15:14 AM

Is this done on purpose by some miners to increase the overall transaction fees and collect more fees?

One of the reason I can think of is, not knowing how to set the fees. These days almost all wallet software have feature to adjust fees. I use Electrum always and most of the time the default fees are higher than the minimal fees which is fine to get the next block so knowing to adjust fees is very important for anyone who is in bitcoin.

Another reason could be, not aware of what fees to set but in this particular case it does not seem the suggestion from the wallet software was followed too. 653 sat/vB seems too high to suggest. The sender could be testing something. Or he missed type the fees field when he was trying to adjust the fees.

Usually I noticed gambling companies do not care about fees. They have fixed fees set for withdrawals and sometimes it's too high than the required fees for a block.

Charles-Tim

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Quote from: Little Mouse on May 01, 2023, 03:22:24 AM

Or they are using a wallet which estimates the wrong fee

I have used some wallets that estimate fee wrongly. Even most wallets do that. There are times I will check the mempool and check the reputed wallets, there will be difference in fee estimation at times, but just little differences. What I know is that even as the wallets estimates fee wrongly, the wallet do not include fee very high like that. Likely not because of bitcoin wallet fee estimation algorithm.

Little Mouse

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There's no logical explanation of paying such high fees other than a mistake or someone wants to tip the miner lol. Or they are using a wallet which estimates the wrong fee, that's the only logical explanation I can imagine in such cases because I have paid higher fee with Electrum when I wasn't much expert on the fee part. I can't imagine why people would such higher fee when they can even get their transactions confirmed in the next block with far lower amount of fees, specially the third transaction in the OP which had more than 1000 sats per byte! In most of my transactions, I pay lower than 1000 sats in total Cheesy

Charles-Tim

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Those transactions do not look like transaction send from exchanges that the withdrawal fees are very high. The sender mighty have made a mistake and used too high fee. There are some people in the past that mistakenly used too high fee. If it is because of a reason, I think the senders will be the one that can best answer the reason.

Synchronice

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Look at this Transaction^[1]. It paid 15x more than it was necessary to get confirmation. It paid $38.77 in fees for transaction that worth $180. If you have a look at old transactions of this wallet, it was always paying optimal fees.
I don't really know what happened there, while it paid 5x more than recommended, actually $10.56 was spent in fees while transacted amount was $1.41, check: Transaction^[2]
And here - Transaction^[3], someone even paid 56x more.

Is this done on purpose by some miners to increase the overall transaction fees and collect more fees?

Edit: I had to open this thread on Bitcoin Technical Support board, sorry Undecided

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Topic: Why do some people pay illogically high fees for transactions? - page 2. (Read 452 times)