Bitcoin Forum

Hello,

I've noticed several transactions on the blockchain where the average fee shown on Mempool.space is quite low—around 1 sat/vB—but the fee paid for the transaction is actually higher than the amount being transferred.

Here's an example: https://mempool.space/tx/bd9d7c255bad5a51e09ad535f55b51ab19054489b8e46cc24f47a127a5058593

Can anyone explain the purpose of these kinds of transactions?

It's an "Inscription", people who fall for that shit aren't the brightest :P I can only conclude they must earn a lot of money from this idea they're selling to gullible people.

So they want to immortalize themself on the blockchain with their entry?

OK, I've found a tool that shows the "inscription". https://ordinals.com/tx/bd9d7c255bad5a51e09ad535f55b51ab19054489b8e46cc24f47a127a5058593

But honestly, that is very stupid (sorry). In particular the image... And on top of it, it has nothing todo with the purpose of the Bitcoin blockchain.

Together with millions of others who did the same BS.

Remember when NFTs were going to make everyone rich? Turns out it only made a few people rich and many people lost their money. This is just the next in line, and it won't be the last.

Not to immortalise their self but to add that image (NFT) which they want to convince their buyer is worth whatever price they want to sell it to them for, inscribing that into the blockchain cost them a lot in transaction fees.

NFT I consider that trend to be a scam, something which only one or a few people will have to determine how much it will be worth and convince the next person to buy it, which they will stupidly be drawn into. There is always no good resale value for NFTs. Only those with influence benefited, as they are majorly the ones selling, and the buyers are swimming in losses.

Unbelievable. The problem is that anyone trying to learn how the blockchain works just ends up confused by this kind of nonsense.

As far as the Bitcoin blockchain is concerned, I just call it spam. Fees were supposed to prevent spam, but spam got too lucrative for them to care. Look at Johoe's Mempool Statistics (https://jochen-hoenicke.de/queue/#BTC,all,weight): most of that "mountain" of transactions since 2023 is caused by spam.
As much as I don't like the spam, it's part of being censorship resistant: anyone can create any transaction they like (as long as it's valid of course). The external meaning has nothing to do with Bitcoin itself.

Putting this aside, there are many other reasons why you would use different fees. I'll give one. A lot of people don't understand that there are numerous ways in which their behavior can be tracked on the blockchain. Aside from the traditional stuff such as IP addresses, one is fee-rates. If you have 2 addresses that are making transactions during similar times and always use the same fee-rates then it is very likely that they are owned by the same person. There are probably continuously running statistical models doing analysis with different weighs, and they will include fee-rates to some degree.

Although individual things can be debated as some transactions may be possible only to unforeseen flaws in improvement specifications, generally this is correct.

If you're using the same address multiple times, that's a bigger privacy concern than the fees you're paying. Given the number of transactions out there, I'm not concerned about linking 2 random transactions. Mempool.space usually shows (many) hundreds of transactions with similar fees per block.

I bet they'll try, but it's going to be one big guessing game with at best a low probability of 2 addresses being owned by the same person, and many false positives.

I don't think you fully understood me or I failed to express myself correctly. I used the address reuse example as in that case the model will give a stronger probability, but it also works with new addresses. If you reuse 2 addresses that are in two completely separate wallets there is a general risk that comes from address reuse for both clusters. However, linking these two wallet clusters is a completely separate risk which has nothing to do with the previous one. Further, nowhere did I imply that fee-rates are a bigger concern than address reuse. Lastly, the model does not work alone on fees. Fees are part of the model, and it can work quite well. You should definitely always pay different fees using different fee-rates between transactions. It effectively costs you nothing time wise, but provides a small padding for your anonymity.

No, the models work pretty well otherwise nobody would need to use Monero. :)  As I said, there is a misunderstanding. Anything you do differently will help you a bit against such models. I'll leave it at that to avoid going more off-topic.

I’m using Bluewallet on my iPhone and the average fee is 3 sat/vB while the average on mempool is just 1 sat/vB.

A user that doesn’t check the average fee on mempool will sure use higher fees above the average fe on the mempool. Suggested fee on bluewallet is not being updated real time.

This might be other reason aside from inscription fee.

OP's transaction pays 1 sat/vbyte. It's just very large.

You have to understand very fundamentals of Bitcoin mempools, fee rates and how Bitcoin miners pick transactions from tip of mempools for confirmations. They choose waiting transactions on tip of mempools for confirmation first because Bitcoin miners' income is from two main sources including the Block reward and transaction fee. By prioritizing transactions on tip of mempools, they maximize their income from transaction fee.

Now, let's see what Bitcoin users can do to save transaction fees. They only are able to control their bitcoins with private keys with which they can control UTXOs as well as fee rates when broadcasting transactions. Unfortunately, it is only possible if they use non custodial wallets and also know how to customize fee rate. Even if they use non-custodial wallets but only use default or suggested fee rate, they will still overpay in fee.

The majority of users use custodial wallets like accounts on centralized exchanges on which they surely always are charged very expensive withdrawal fees. Most of users overpaid transaction fees depend on centralized exchanges for broadcasting their withdrawals.