
Someone paid $2.6M in fees to move $134 worth of cryptocurrency - sillysaurusx
https://mashable.com/article/million-cryptocurrency-ethereum-fee-paid-by-mistake/
======
abbadadda
This seems like an easy thing to test for? "Like, are you sure you wanted to
pay 19,403x in fees over what you're transferring? Please submit again if
yes." Unreal.

~~~
Kiro
Where would this test happen? There's no official interface. Sure, it can be
(and probably is) implemented in different wallets but if you're interacting
with the blockchain directly no-one can prevent you from doing stupid things
like this.

~~~
Acrobatic_Road
A smart contract wallet like argent could easily prevent this.

------
koolba
Sounds like vanilla money laundering.

~~~
dezmou
I am not expert in blockchain but how can you wash money with transaction
fees, you can't know where the fee are going, right ?

~~~
everfree
The fee goes to the miner of the block with the transaction in it, the "next
block" in a simplified sense.

If you've already mined the next block yourself, you can publish the
transaction directly in the block itself instead of loose out to the network
like a pleb. Then you'll be effectively guaranteed to get the transaction fee
yourself.

~~~
sixothree
Can we see if this particular transaction was broadcast to the network?

------
FalconSensei
> Ethereum users can dictate the terms of their transactions, setting both the
> amount of ETH they want to send and the amount of fees they are willing to
> pay. The higher the fee, the thinking goes, the more likely their
> transaction will be included on the next block — i.e. it will go through
> more quickly. It's possible, therefore, that someone attempted to send $2.6
> million worth of ETH with $134 in fees and simply reversed the two fields.

Having to set up the fee for the transaction to hope the transaction would
happen faster? Yeah, I don't see crypto replacing banks.

edit: forgot the quote

------
RcouF1uZ4gsC
> Coindesk reported at the time that the South Korean blockchain firm behind
> the error admitted to the mistake, contacted the mining pool that had
> benefitted, and worked out a deal where the firm got half of the
> accidentally sent ETH returned. Notably, that partial happy ending 100
> percent relied on the goodwill of the mining pool, as ETH transactions are
> non-reversible by design.

If cryptocurrency use increases it will eventually approach how real currency
is used with defacto Know Your Customer and reversibility.

------
smaili
It's strange that with major currencies having these high fees, people haven't
moved to Nano since their entire premise is around being feeless.

~~~
nytf3
the lack of awareness around nano is puzzling to me. I assume its because nano
became known around the end of 2017 along with many scam coins, and thus
became associated with them.

but today if you described implementing a gossip protocol with nanos features
(permissionless decentralization, 0 fees, <1s tx), many people would say it is
impossible, but here we are with a 4 year mainnet with no serious issues

------
duxup
Who is the fee paid to in this case?

~~~
schoen
In Bitcoin it would be paid to the miner of the individual block where the
transaction appears; I assume the same is true for Ethereum. (The miner, as
part of the mining process, specifies an address where the network mining
reward as well as the fees in the block are deemed to be sent.)

Edit: yes, Ethereum uses the same concept here and there is a field in the
block header for the miner's address, which is how the miner gets paid for
mining.

Edit 2: In this case a parsed version of the Ethereum block in question,
linked to from the article, is at
[https://etherscan.io/block/10237208](https://etherscan.io/block/10237208) and
shows that the miner was "Spark Pool" (a mining consortium based in China,
[https://www.sparkpool.com/en/](https://www.sparkpool.com/en/)).

Mining pools aren't required to identify themselves, but identifying
themselves may create goodwill, for example by slightly assuaging fears that
one entity secretly controls mining on an entire chain, and might help pools
to market themselves to prospective members or investors.

~~~
duxup
Thank you.

------
saalweachter
Given that this was apparently a "switched two fields" error, does anyone want
to comment on them apparently intending to spend $134 in transaction fees to
move the money?

------
YetAnotherMatt
Would the following theoretically work?

1\. Monitor all transactions in the public pool for their fees.

2\. As soon as their is a public transaction in the pool that has over 1M$ in
fees, spin up as many cloud resources as possible and mine for the block.

3\. As soon as the block is mined, stop mining and go back to step 1.

~~~
schoen
Yes, but you have to worry about several things, at least:

* what's your latency for noticing and spinning up those resources (especially in chains where the average time between blocks is very short)?

* can you cost-effectively confidently outcompete ASIC miners with rented GPUs, even given a reward that's much larger than normal? (probably, given this very extreme anomaly, but you have to do the calculation)

* can you actually rent enough GPUs in practice to outcompete the ASIC miners?

* will it be worth it to ASIC miners who know or speculate that you're doing this to speculatively mine for a while on a shorter chain in which they receive the reward instead of you, in the hope that they can make it longer than yours?

Edit: Finally, do some of the ASIC miners have offline capacity (e.g. old
equipment, or equipment located in places where electricity got more
expensive) that is physically present in a datacenter but just powered off
that they can _also_ spin up quickly in response to these conditions?

------
_bxg1
Why do you manually enter your own transaction fee at all? Is it not just a
percentage of the transaction amount? What happens if you enter too small a
fee?

~~~
DSMan195276
I'm not entirely sure if you've used Bitcoin before, but the transaction fee
is basically a way to pay a miner to put your transaction into the block
they're mining. A higher fee gives miners a higher incentive to add your
transaction. But it's generally just a flat value, not tied to the amount
being transferred in the transaction - don't think of it as a tip, think of it
as paying the miners to take your transaction. Depending on the digital
currency you're using, adding too small of a fee may mean your transaction is
never added to a block and thus never actually happens.

For Bitcoin in particular I haven't been paying too much attention recently
but I do know transaction fees have been getting much higher the past few
years, like 5 to 10 dollars or so (Which means you have to pay 5 to 10 dollars
to transfer any amount of Bitcoin from one address to another).

~~~
_bxg1
I have not used it before. I just assumed that - whether a percentage or a
flat fee - the amount would be... deterministic at least? That the entity
being paid the fee would at least state their price somehow, instead of the
user having to just, like, guess what their tribute should be and hope it's
accepted. What you describe sounds incredibly bizarre to me.

~~~
DSMan195276
Well keep in mind, your transaction basically just floats out in the void
until a miner adds it to their block, so you have no idea who's actually going
to add it (if anybody does) because due to how Bitcoin works you have no idea
who's going to mine the next block(s). It's also basically another market to a
degree - It's not really about how much a miner wants as much as how many
transactions there are with a particular fee. The blockchain only supports so
many transactions per block, so if you send a transaction with no fee and
there's enough transactions with fees to fill every block (like with Bitcoin),
your transaction will likely never get picked up because there's no reason for
a miner to take it.

That said, I agree I'm not a huge fan of a system, but it makes some sense
from the standpoint of how Bitcoin works - miners are paid for their work via
new bitcoins created as part of their block. But, Bitcoin itself is designed
to be deflationary and eventually the number of new bitcoins per block will go
to zero, leaving the fees as the only way miners get paid. And the fees thus
aren't deterministic as a way of allowing the amount miners are paid to vary
over time.

Still, I don't think it's quite as bad as you're thinking - it's not really
hard to figure out what an acceptable fee value is with a quick google, and it
doesn't really change that much day to day.

------
biolurker1
Sounds like a developer error with Truffle and gas denominations Wei gwei etc

------
Hamuko
Cryptocurrency won't work as a general use currency as long as this is
possible and irreversible. So basically, it won't work.

~~~
aeternum
I'm not convinced that is true. Tools can be written to validate amounts
carefully.

Wire-fraud is also relatively common and often not reversible but people and
businesses still wire money frequently.

Also happens with HFT:
[https://www.bbc.com/news/magazine-19214294](https://www.bbc.com/news/magazine-19214294)

~~~
crimsonalucard1
It is reversible. If you make a mistake like this oftentimes you can rely on
law enforcement/bank to force the money to be given back. Not sure if this is
possible with crypto.

~~~
everfree
Often it's not reversible in practice, if the destination bank/jurisdiction is
not cooperative.

This is why you hear people losing their life savings to scammers in Nigeria,
instead of just successfully suing them to get it back.

~~~
crimsonalucard1
Yeah but usually that's not the case. Usually you can get it back.

I would say more often than not it's reversible.

------
lgl
From the article:

> In February of 2019, someone accidentally paid 2,100 ETH in fees to move .1
> ETH. Coindesk reported at the time that the South Korean blockchain firm
> behind the error admitted to the mistake, contacted the mining pool that had
> benefitted, and worked out a deal where the firm got half of the
> accidentally sent ETH returned.

Who wouldn't want to live in a cryptocurrency powered world economy, right? No
mistakes allowed, no insurances, so many nice guys like these. What could go
wrong?

~~~
pxeboot
Like cash, these properties are also desired in many cases.

