Written by: Huang Shiliang
Recently, whether it is Bitcoin or Ethereum, their network miner fees have been hitting new lows.
Once upon a time, these two chains were dubbed 'noble chains' due to their high transaction costs, being the places where the industry consumed the most user fees. But in recent months, Bitcoin's miner fees have basically returned to a historical low of 1sat/vbyte, and Ethereum's gas fees have also dropped to a level of just a few Gwei.
It's time for a nostalgic moment to share some stories from the cryptocurrency world. I will recall a few 'outrageous yet real' stories about miner fees in Bitcoin.
Miner fees for withdrawals from exchanges used to be sky-high.
Around 2017, I personally experienced a 'crisis' triggered by miner fees.
At that time, I was preparing to withdraw a Bitcoin from an exchange, but after submitting the application, I found that the transaction was taking a long time to confirm on the blockchain. When I checked the transaction details on a blockchain explorer, I discovered that the transaction contained a huge number of inputs with extremely small denominations (UTXO).
The size of a transaction (in bytes) depends on the number of its inputs and outputs. The more inputs, the larger the transaction size and the higher the required miner fee.
However, the exchange at that time adopted a fixed fee withdrawal strategy and did not dynamically adjust the fees based on the actual 'size' of the transaction. This led to my transaction being severely underfunded in miner fees, and the mining pool only recognized the money, not the person; my transaction was ruthlessly abandoned by miners across the network.
Based on the network congestion at that time and the huge size of this transaction, it actually required miner fees as high as 0.5+ Bitcoin—at today's prices, that is truly a huge sum of money.
Let me briefly explain the technical principles:
Just like the news that a certain bus company took several truckloads of coins to the bank for deposit, which required dozens of employees and several days to count. The manpower and material costs consumed in this process might even exceed the total amount of coins received.
Similarly, in the Bitcoin network, consolidating a large number of fragmented UTXOs into a single large amount also incurs huge miner fee costs.
I contacted the exchange's customer service, hoping they could help expedite the transaction, but the response I received was something like 'This is a characteristic of blockchain, please be patient', which felt like an official excuse. The customer service just wanted to shirk responsibility.
I traced the origin of this transaction. By analyzing on-chain data, I pieced together an astonishing conclusion: this exchange's hot wallet system likely fell victim to a 'dust attack'.
For a period, the attacker continuously sent thousands of extremely small Bitcoin transactions (for example, just above the dust transaction threshold of 546 satoshis) to the recharge addresses of the exchange's hot wallet.
When ordinary users initiate a withdrawal, the exchange's wallet system automatically grabs these fragmented UTXOs as transaction inputs, thus constructing an 'extremely bloated' transaction. However, the miner fee is a fixed value, causing these withdrawal transactions to get stuck.
I suspect this might have been a form of malicious competition within the industry at that time.
In fact, it was very common in the early stages of the industry for incidents of using offchain wallets to sort fragmented coins to be seen as 'attacks'. Now, various exchanges have technically prohibited such attacks, for instance, by not allowing miners to withdraw directly to exchanges. The withdrawal system of exchanges now also supports dynamic adjustment of miner fees based on transaction size.
In the end, because I urgently needed this fund, I had to pay out of my own pocket, contact a mining pool, and pay a high fee to 'rescue' this transaction. Looking back, that was indeed a lot of money, damn it.
"Kind Culture" and "Cunning Strategy"
There is an unwritten 'kind culture' within the Bitcoin mining pool community: when they package a block that includes a transaction with an abnormally high fee, most mining pools tend to choose to return this 'windfall' to the sender.
Such incidents are not uncommon in the history of the cryptocurrency space. The earliest case I recall dates back to around 2013, when the famous 'KouMao Mining Pool' refunded a large amount of abnormal miner fees to users.
Since then, it seems that similar news appears almost every year. The mining pool did not see this windfall as profit to be divided but instead proactively contacted the mistaken user and returned the funds.
In a world where money is recognized but people are not, the Bitcoin mining pool community is still quite kind.
However, this seemingly 'kind' mechanism can also be exploited by those with ulterior motives, becoming a sophisticated 'mixing' strategy.
The miner fee for a Bitcoin transaction equals its total inputs minus total outputs. This fee will ultimately become part of the block reward and be packaged into the Coinbase transaction of that block. The Coinbase transaction is the first transaction of a block, which does not have conventional inputs and is created by miners 'out of thin air' to reward themselves. This means that once your funds enter the Coinbase transaction in the form of miner fees, all of its previous transaction history is severed.
Suppose you have Bitcoin in an address that has been marked as 'dirty money' by law enforcement; how would you clean it? You could construct a special transaction: the input is 1 BTC from this 'dirty money' address, but the output address only receives 0.001 BTC. Thus, the remaining 0.999 BTC becomes the miner fee. Once a mining pool packages this transaction, the 0.999 BTC merges into that mining pool's Coinbase reward, completely severing it from its past history.
Next, you just need to contact this mining pool, negotiate a commission ratio, and have them transfer this 'clean' Bitcoin reward to your specified new address. The entire process is seamless, completing a sophisticated money laundering operation.
Extreme moments in history: those jaw-dropping transactions
Looking back at the history of Bitcoin, there are always some extreme transaction records that intrigue us:
The highest miner fee in history: On December 12, 2011, a transaction txid:1d7749c65c90c32f5e2c036217a2574f3f4403da39174626b246eefa620b58d9 made history. It sent 207 Bitcoins, but the final receiving address only received 35.77 Bitcoins, with a staggering 171.79869184BTC paid out as miner fees. Calculated at today's prices, the value of this fee is close to twenty million dollars.
The most 'stingy' whale in history: In stark contrast, there was an astonishing transaction in history that transferred over 500,000 Bitcoins in one go, but the miner fee paid was zero. txid:044e32f5e01d70333fb84b744cb936bf49acab518282c111894b18bcf3a63c12.
This incredibly wealthy holder can truly be described as extremely stingy.
There are so many interesting stories from the cryptocurrency world, it's a pity that there aren't many coins left, only stories.
I will summarize the ETH version of the gas story tomorrow.
