F2Pool has returned 19.82 BTC received in an apparent mistake by Paxos.
Bitcoin mining pool F2Pool has refunded 19.82 BTC (appr. $520,000) that it received as bizarre fee rewards for confirming a transaction by blockchain company Paxos.
On Sept. 10, The Crypto Basic reported a weird transaction, which saw a Bitcoin address mistakenly pay 19.82 BTC (worth $511,000) to transfer 0.074 BTC (approximately $1,900).
The average network fee on the day was a mere $2.176, which means the sender overpaid by a whopping 234,834 times.
Interestingly, blockchain company Paxos, which issues stablecoins such as its USDP and the recently launched Paypal USD (PYUSD), later confirmed that it was behind the erroneous transaction.
Paxos claimed the transaction resulted from a bug on a single transfer, which has now been fixed, and that it was already in touch with the miner to facilitate a refund.
F2Pool mined the Bitcoin block containing the transaction in which Paxos paid the exorbitant fee. Following an identity verification process, F2Pool has now “fully refunded the fee” to Paxos, providing the transaction ID as confirmation.
We would like to provide an update regarding the recent mistakenly overpaid ~20 BTC transaction fee we received. After conducting identity verification, we have confirmed the ownership of these BTC, and fully refunded the fee to the sender, @Paxos.
TXID: https://t.co/O9HOktlsPU
— f2pool ? (@f2pool_official) September 15, 2023
Blockchain’s Open Nature Facilitates Refund
The decentralized nature of blockchain technology arguably played a vital role in the latest turn of events involving F2Pool and Paxos. Bitcoin users incentivize miners to process transactions through the payment of network fees.
At the same time, users can verify miner addresses, potentially including their real-world identity, with blockchain explorers and sophisticated on-chain analytics tools. Although it is often a moral question whether or not miners should refund such erroneously paid fees, the latest F2Pool refund is not the first such case.
In 2021, an Ethereum miner returned $23.7 million to a non-custodial crypto exchange, Deversifi. The Bitfinex-linked platform had mistakenly paid the hefty amount just to transfer 100,000 USDT.