Bitcoin User Pays $60,000 Fee Due to Misunderstanding of Units

On April 8, 2025, a Bitcoin user inadvertently paid an exorbitant $60,000 in fees during a replace-by-fee (RBF) transaction. The user intended to expedite a pending transaction by increasing the fee, but a misunderstanding of fee units led to an extreme overpayment. The user confused sat/vB (fee per byte) with total satoshis, resulting in a fee that was far beyond the norm.

The incident highlights the importance of understanding fee units in Bitcoin 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 about 0.75 BTC but forgot to redirect the change back to their own address. As a result, that 0.75 BTC was treated as a fee and sent to miners.

This costly mistake underscores the risks associated with manually entering fee values and using advanced wallet settings without a full understanding of how they work. The user likely started with a default or conservative transaction fee, which is common. However, when attempting to adjust the fee, they confused the fee units, leading to a massive overpayment. The wallet interpreted the input as 305,000 sats per byte instead of 30.5 sats per byte, resulting in a fee that was far too high.

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 differs from child-pays-for-parent (CPFP) in that RBF replaces the original unconfirmed transaction with a higher-fee version, while CPFP adds a high-fee child transaction to boost the parent’s confirmation. Both methods have their use cases and risks, and users should be aware of the differences.

To avoid similar mistakes, users should choose reputable Bitcoin wallets that clearly display and explain fee types. It is crucial to understand the difference between sat/vB (satoshis per virtual byte) and total satoshis to avoid accidental overpayments. Always double-check the transaction details, including the recipient address, fee amount, and change address, before confirming. For new users, it is advisable to let the wallet suggest the fee based on network congestion. Additionally, sending a low-value test transaction can help confirm that everything is set correctly before sending a significant amount.

Monitoring Bitcoin network fees in real time using websites like mempool.space can help users choose the best time to send their transactions. It is also important to avoid panicking over slow confirmations and to stay informed about wallet updates and bugs. Following these precautions can help users avoid paying unnecessary fees and prevent costly mistakes.