March 27, 2024
Bitcoin transaction mishap resulting in over $500,000 in fees
Bitcoin News

Crypto Community Stunned as $500,000 Bitcoin Transaction Fee Error Unveiled

The Bitcoin miner who initially received the 19.8 BTC in fees has now given back the funds to Paxos, the blockchain infrastructure firm, following their assertion that the company had mistakenly paid over $500,000 in BTC transfer fees.

On September 10th, the cryptocurrency community was left puzzled when a BTC transaction incurred approximately $500,000 in fees to transfer an amount of around $2,000, whereas the average network fee was just around $2. Various speculations arose, with some speculating that the transaction might have resulted from copying and pasting data, inadvertently inserting an output into the fee box without thorough verification.

On September 13th, Paxos publicly acknowledged that their server was responsible for the transfer. In their statement, the company reassured its users that their funds remained secure and that they were indeed owned by Paxos. Paxos also clarified that PayPal was not implicated in the error and acknowledged that it was their own mistake. Almost a day after Paxos made these claims, the Bitcoin miner who had received the funds took to X (formerly known as Twitter) to express their frustrations, ultimately agreeing to refund the amount to Paxos. The miner polled their X followers, seeking opinions on how to proceed, and a majority voted in favor of redistributing the money to other Bitcoin miners.

However, it appears that this advice was not followed. Blockchain data, as shared by Bitcoin explorer Mempool, confirms that the funds were returned on September 15th. It’s worth noting that substantial losses due to transaction fee errors have occurred in the past. In 2019, for example, an Ethereum user lost nearly $400,000 in ether after erroneously pasting values into the wrong fields. Fortunately, the Ethereum mining pool Sparkpool stepped in to help the user recover half of the lost funds.

Image by pixabay

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