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Home Cryptocurrency news Ethereum

Why Did This Crypto User Spend $2.5 Million In Ethereum Fees To Send 0.5 ETH?

Tony Spilotro by Tony Spilotro
7 months ago
in Ethereum
Reading Time: 2min read
ethereum
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This morning, Ethereum network fees surged to over $2.6 million in a single hour. The spike in the metric was primarily due to one actor sending just 0.55 ETH, but paying over $2.5 million in USD value to do so.

Was this a costly mistake this user crypto user won’t soon forget, or is there something else more sinister at play?

Ethereum Fees Spike To $2.6 Million In a Single Hour Due To Just One Transaction

Ethereum, like many cryptocurrency networks, requires a small fee paid through a portion of the protocol’s native crypto token to send transactions. These transaction fees typically are worth just a fraction of the cost of the total token’s value.

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But according to data from crypto analytics firm Glassnode, Ethereum fees skyrocketed to over $2,631,000 in one hour alone.

Related Reading | Ethereum’s Best Use Case Goes Parabolic, DeFi Users Double in 6 Months 

The unusual blip in the data prompted an investigation into why the hourly transaction fees rose so suddenly and by such a drastic amount.

Blockchain transactions are completely transparent and have revealed that a user mistakenly sent 0.55 ETH – valued at roughly $133 – for 10,668.73185 ETH. The staggering transaction fee is the USD equivalent of $2,592,000.

#Ethereum fees shot up to $2,631,127 within a single hour.

Historically, this is by far the highest value we've seen.

This increase was due to a single Tx that spent 2.5 million USD in fees to transfer 0.55 $ETH.

Tx ID: https://t.co/Loerq8gTZU

Chart: https://t.co/240DVD0pmt pic.twitter.com/jEk4bgiKIb

— glassnode (@glassnode) June 10, 2020

Costly Cryptocurrency User Error, Or Money Laundering On The Blockchain?

Cryptocurrency users were quick to point out this user’s costly mistake, however, could there be something more at play?

When making any cryptocurrency transaction, especially when sending between wallets, it is important to double and even triple check things like addresses and the amount and fee fields.

Clipboard malware exists that swaps out crypto addresses when pasted into the recipient field.

User error very well could have led to this user spending $2.5 million in fees just to send slightly over half of an Ethereum token, but anyone with that level of wealth invested into cryptocurrencies isn’t likely a fool who is soon departed from their money, as the saying goes.

Related Reading | Global Macro Investor: Explosive Ethereum Upmove Above $300 Clears Path to $500 ETH

For that large a sum of Ethereum holdings, the user is likely an early supporter or high wealth individual. And while that doesn’t mean they can’t make mistakes just like everyone else, that theory becomes less likely due to the size of the crypto holdings sent.

Internet sleuths have quickly jumped on the case, and offer up a variety of theories. One theory, suggests that the user is actually a hacker who is washing the ETH in some way.

The argument here is that why would any criminal so brazenly wash cryptocurrency using a transparent address and do so in a manner that raised this many red flags?

The answer could be truly anything, and due to the somewhat anonymous nature of cryptocurrencies like Ethereum, we likely won’t ever know the true answer to why this occurred.

Tags: bitcoinbtcusdBTCUSDTcryptoethbtcethereumethusdETHUSDTxbtcusd
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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