In a recent development within the Bitcoin community, F2Pool, a prominent Bitcoin miner, has successfully rectified a significant error in a Bitcoin transaction that resulted in an extraordinarily high transaction fee of $510,000, nearly 480,000 times the typical network fee of $2.176. The responsible party, Paxos, acknowledged its mistake and attributed it to a bug in a single transaction.
Based on on-chain data from Mempool on X, F2Pool has returned the overpaid fee of 19.82108632 BTC to Paxos. This decision follows extensive discussions and deliberations within the Bitcoin community, including figures like Stake.fish founder Chun Wang, who expressed some reservations about the refund agreement with Paxos.
On September 10, 2023, Paxos attempted to execute a modest transfer of 0.074 BTC, valued at less than $2,000. Unfortunately, an error occurred, resulting in an exorbitant transaction fee of 19 BTC, approximately equivalent to $510,000. This incident marked the highest transaction fee ever recorded on the Bitcoin network.
Jameson Lopp, co-founder of CasaHODL, conducted an analysis of the incident and speculated that the error might have originated from a software issue within an exchange or payment processor's address handling system. Lopp pointed out that the address in question, which had processed over 60,000 transactions, likely experienced a miscalculation in the change output, leading to the excessively high transaction fee.
Chun Wang, co-founder of F2Pool, disclosed that the user had a three-day window to claim the overpaid fees. In the event of non-claim, the miner would redistribute the funds among miners, a decision aimed at fairly addressing potential unclaimed fees.
Lopp commended the Bitcoin network for its cooperative nature following the resolution of this issue. He highlighted that Bitcoin is an adversarial network, but it also exhibits a cooperative spirit. Lopp emphasized that miners, being human, understand that mistakes can happen. While retaining excessive transaction fees could result in short-term gains, he regarded the decision to return the funds as the humane choice.
Initially, some speculations pointed towards PayPal's involvement, as the transaction behavior resembled a previously associated defunct address. However, a Paxos spokesperson neither confirmed nor denied any connection to PayPal.
This incident is reminiscent of past occurrences in the cryptocurrency space. In 2019, an Ethereum user lost nearly $400,000 in Ether due to inputting incorrect values in transaction fields. Fortunately, the Ethereum mining pool Sparkpool stepped in and assisted in recovering half of the lost funds.
In the world of cryptocurrency, cooperation and ethical considerations continue to play a crucial role in resolving unexpected challenges.