Mistakes come in grades but a $308,000 mistake, that’s a costly mistake! That might have been the case of an anonymous sender who intending to send 0.1 Ether ($14.71/ N5,369.15) via the ethereum blockchain network ended up paying a transaction fee of 2,100 Ether ($308,000/N 112,420,000). Think of it this way, you send N500 to your guy, Friday, but instead of being charged N52.50 in fees you get charged N8,500,000 in fees.
Just like in the legacy financial systems where mistakes can happen they also happen in the cryptocurrency space as well. The mistake the user likely made was not setting the fee limit or entering some random figures when entering the details of the transaction.
Now hold on a minute before you start taking a jab at cryptocurrencies it is important you understand how the fee structure work?
Usually, when dealing with custodians (cryptocurrency exchanges like Quidax, Coinbase or Binance) the fee limits are already set at between free to $0.1, much like when sending money from your bank account to a different bank. However, if you have access to your private keys which is usually the case when dealing with decentralised exchanges or a hardware wallet like Ledger Nano or Trezor you get to set the limit or the amount to pay as gas for your transaction to be processed. The latter is likely what happened in this case.
One question you might ask is why couldn’t the user go through the traditional methods of sending money to avoid any chance of making that mistake. Look at it this way, say you wanted to send money from Nigeria to Kenya, it would usually take you 3 days and about 10% in fees depending on the amount of money you want to send. However, done well with cryptocurrency (setting the right fee limit) that transaction would take less than 2 hours and less than half the fees.
Back to the mistake made by the anonymous user, though some say it was done intentionally as a sign of goodwill or a way of donating to the cause (Go crypto go) there are other ways that it could have been achieved rather than giving folks like you one more reason to raise an eyebrow at cryptocurrency.
But just in case you are like the unknown user and want to donate to the cause here’s how to donate to the Ethereum Foundation and remember to check your transaction fee limit properly or use a cryptocurrency exchange that caps the fees so as to avoid donating on top of your donation.
This article is in partnership with Quidax. Quidax is a European based digital assets exchange with a focus on Africa. We provide a seamless platform for users to send, receive, buy and sell cryptocurrencies using their local currencies.