Why do some people pay illogically high fees for transactions?

[Synchronice]

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  .

[1714110619]

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[1714110619]

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[Charles-Tim]

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.

[Little Mouse]

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 

[Charles-Tim]

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.

[BitcoinGirl.Club]

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.

[nc50lc]

-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.

[Yamane_Keto]

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.

[SamReomo]

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.

[Poker Player]

-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.

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. 

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 

Cheers to all, have a great week.

[DaveF]

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

[BlackHatCoiner]

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.

[pooya87]

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).

[m2017]

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/

[serveria.com]

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  .

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....   

[Synchronice]

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.

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.

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.

[NotATether]

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.

It's got to be some automated software that was created pre-2014 or similar, where the monetary value of the fees did not matter so much as they do today. Not necessarily an exchange, but could be a script for any website, really.

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.

The only way to tell whether the wallet is indeed making Segwit-enabled transactions is to see whether there is a witness data in the raw transaction hex.

[bettercrypto]

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  .

This is the first time I've seen that the transaction fee using bitcoin is high around the 38.88$ charge. It's really quite majestic. How did this happen?

      I remembered, on an exchange platform when I was supposed to make a transaction withdrawal in Bitcoin, I noticed that the fee was high, although it is not like this 38$ which is really expensive, it seems to be around 5-6$ if I'm not mistaken, but when I checked with another exchange, their fee was around 3$.

But here it is different? Couldn't it also use an exchange so the transaction fee is a bit expensive?

[ABCbits]

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.

The only way to tell whether the wallet is indeed making Segwit-enabled transactions is to see whether there is a witness data in the raw transaction hex.

That's true when we're talking about P2SH address (which has prefix 3...). But address input on all transaction which mentioned by @Synchronice use either P2WPKH (bc1q...) or P2TR (bc1p...) though.

But here it is different? Couldn't it also use an exchange so the transaction fee is a bit expensive?

Probably no. While exchange intentionally charge high withdraw fee towards it's user, they only spend fraction of it to pay Bitcoin on-chain transaction fee.

[Synchronice]

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.

The only way to tell whether the wallet is indeed making Segwit-enabled transactions is to see whether there is a witness data in the raw transaction hex.

That's true when we're talking about P2SH address (which has prefix 3...). But address input on all transaction which mentioned by @Synchronice use either P2WPKH (bc1q...) or P2TR (bc1p...) though.

But here it is different? Couldn't it also use an exchange so the transaction fee is a bit expensive?

Probably no. While exchange intentionally charge high withdraw fee towards it's user, they only spend fraction of it to pay Bitcoin on-chain transaction fee.

Yeah, exchanges charge high but actually don't send transactions with high fees and on different post people were quoting me that exchanges raise tx fees. For me, the high exchange fees for bitcoin withdrawals with actually low transaction fees make it very expensive, slow and unwanted process to use bitcoin for frequent transactions. Things are manageable when you use your own wallet but sometimes when I expect to receive one confirmation in 20-30 minutes, someone comes out of nowhere and starts to send transactions with 2000 sat/vB, raising fees for everyone and then I receive bitcoins lately.

Yesterday I was checking transactions in mined blocks and I don't know what to think but people really pay high fees for no reason. You'll often see two type of people who pay the highest transaction fees: One are those who spend more than one bitcoin and another part are the ones who spend more in fees than in transaction.

[philipma1957]

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  .

first off you don't understand miners at all if you need to ask that question.

I have a thread that explains how major pool operators can jack fees up and still make money do in.

You need to have control of 30% of the network to do the manipulation I explained in the thread.

https://bitcointalk.org/index.php?topic=2634505.0

Now why a person is willing to pay the fees you found I don't know.

I do know why these fees are fairly high and will continue to be high.

BTC has a flawed fee setup that can be manipulated.