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John Martin 29 Nov 2023 ◦ 3 min read

A Hack Resulted in a Record-High $3M Bitcoin Transaction Fee

A Hack Resulted in a Record-High $3M Bitcoin Transaction Fee

A recent BTC transfer, which was mined in block 818087, has set a new record for the largest-ever transaction fee paid in the 14-year history of Bitcoin. Let’s explore the details of this suspicious transfer and find the reasons behind such a huge amount of the fee paid. 

What Happened? 

On 23 November, the Bitcoin blockchain registered a transaction to transfer 139.4 BTC (~5.2 million USD), of which 83.65 BTC ($3.1 million) was absorbed as a transfer fee. This is the largest number of miners received to confirm a transaction in the history of Bitcoin.

The previous record for the largest transaction fee in the history of Bitcoin was $500,000, paid in September. This fee was mistakenly overpaid by the crypto services provider Paxos, and F2Pool, the miner who handled the transaction, agreed to reimburse Paxos. 

This time, much less than half of the original amount – 55.77 BTC ($2.1 million), reached the recipient. The payment was probably made by mistake: the cost of the fee rarely exceeded the amount sent, even when the Bitcoin network was busy. The sender's wallet was created on November 23 and had three transactions before the record fee was paid.

The user nicknamed @83_5BTC, from whose address the record $3.1 million fee was paid on November 23, said he was the victim of a hacker.

“It was my BTC that paid the high fee.
I created a new cold wallet, transferred 139 BTC to it, and it was immediately transferred to another wallet.
I could only imagine that someone was running a script on this wallet and that the script had a strange fee calculation”. 

Representatives from AntPool, who verified the transaction, did not comment on the situation.

How the Wallet Was Hacked?

It is believed that a third party hijacked the wallet during fund transfers. Developer Monoaut, who created the Mempool Bitcoin provider, believes the cause of the hack was the wallet's low entropy – an insufficient level of randomness in the keys generated, which increases vulnerability to hacking.

Transactions were boosted by replace-by-fee (RBF), a Bitcoin protocol that allows the sender to increase the fee for an unconfirmed transaction to speed up its processing by the network.

In such a case, several attackers could have competed to steal funds and raise fees to speed up the withdrawal of funds to their address, the expert added.

Mononaut also noted that the commission paid was exactly 60% of the total 139.42 BTC stolen, while the potential hacker also stole 0.001 BTC from the same address, paying 0.0006 BTC as a commission.

If the low entropy is indeed the case, experts say that multiple attackers could compete to steal funds simultaneously, resulting in very high fees.

Will the Money Be Returned?

The transaction was conducted by AntPool pool miners in block number 818087. The miner who executed the transaction subsequently agreed to refund the funds overpaid to the user. There have since been online reports stating that the mistake may have been made by the miner.

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