Bitcoin User Loses $60,000-$70,000 Due To Fee Unit Confusion

On April 8, 2025, a Bitcoin user inadvertently paid an exorbitant fee of $60,000-$70,000 during a replace-by-fee (RBF) transaction. The user intended to send 0.48 BTC but ended up paying a fee of 0.75 BTC due to a misunderstanding of fee units. The user confused sat/vB (fee per byte) with total satoshis, leading to an extreme overpayment. This incident highlights the importance of understanding fee units and the risks associated with RBF transactions.

The user initially sent a transaction with a standard fee that was not high enough to confirm quickly. In an attempt to expedite the transaction, the user doubled the fee and changed the recipient address. However, in the second RBF attempt, the user added a large unspent transaction output (UTXO) of 0.75 BTC but forgot to redirect the change back to their own address. As a result, the 0.75 BTC was treated as a fee and sent to miners.

This incident underscores the potential for significant losses due to minor confusion between fee units. Many Bitcoin wallets allow users to set fees in either total satoshis or fee per virtual byte (sat/vB). The user likely mistook 305,000 sats as 30.5 sat/vB, leading to an excessively high fee. This error resulted in a loss of more than $60,000, demonstrating the critical importance of double-checking fee units before confirming a transaction.

RBF is a feature that allows users to resend a transaction with a higher fee if the original one is stuck in the mempool. It was proposed by Bitcoin's creator, Satoshi Nakamoto, and later formalized as "opt-in RBF" by developer Peter Todd. However, RBF is controversial due to its potential for enabling double-spending attacks, encouraging miner-fraudster collusion, and adding complexity to transactions. Critics argue that RBF undermines the finality of unconfirmed transactions, making user errors more likely.

To avoid similar incidents, users should choose secure Bitcoin wallets with transparent fee options, understand the difference between sat/vB and total satoshis, and always double-check transactions before confirming. It is also advisable to let the wallet suggest optimal fees, especially for new users, and to monitor Bitcoin network fees in real time. Additionally, users should stay informed about wallet updates and bugs, as software changes can impact fee calculations. By following these precautions, users can minimize the risk of accidental overpayments and ensure the security of their transactions.