Bitcoin

Miner returns over $500K in BTC transaction fee overpayment to Paxos

The Bitcoin (BTC) miner who received the 19.8 BTC in fees has returned the funds to blockchain infrastructure firm Paxos, after its claims that the company made the mistake of paying over $500,000 in BTC transfer fees. 

On Sept. 10, the crypto community was puzzled after seeing a BTC transaction that paid around $500,000 in fees to move around $2,000, while the average network fee was around $2. Various speculations were raised, with some believing that the transaction was done by copy-pasting data and accidentally pasting an output into the fee box without double-checking. 

On Sept. 13, Paxos announced that it was their server that made the transfer. Following its claim, the company assured its users that their funds were safe and that the funds belonged to Paxos. The company also clarified that PayPal was not involved in the mistake and admitted that the error was its own.

Almost a day after Paxos’ claims, the Bitcoin miner who received the funds went on X (formerly Twitter) to express frustrations after agreeing to refund the amount to Paxos. The miner asked their X followers what they would do in his stead, and a majority voted to just distribute the money to other Bitcoin miners.

However, this advice doesn’t appear to have been taken. Blockchain data shared by Bitcoin explorer Mempool confirmed that the funds were indeed returned on Sept. 15.

Related: How to strike a balance between blockchain transparency and privacy: Nansen CEO

Thousands of dollars in transaction fee mistakes have been lost before. Back in 2019, an Ethereum user lost almost $400,000 in Ether (ETH) after making the mistake of pasting values in the wrong fields. Luckily, the Ethereum mining pool Sparkpool helped the user recover half of the funds lost.

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