Antpool to Refund $3 Million Bitcoin Fee, Seeks Claimant’s Identity
Crypto users may lose funds when they send digital assets at high transaction costs.
On 10 September 2023 Paxos processed a transaction on the Bitcoin network at a cost of 20 BTC, worth about $510,750.
Using multisignature when processing transactions may prevent crypto fee mistakes.
Keywords: Transaction fee, BTC fee, crypto fee, BTC fee error, crypto fees mistakes, bitcoin mining pool
Introduction
The absence of intermediaries in the blockchain sector has its own challenges such as irreversible transactions. Also, smart contracts control most of the processes such as gas fee deduction from user wallets.
However, there are situations where mistakes occur due to software bugs or human errors. For example, some network users’ errors have resulted in payment of very exorbitant transaction fees.
Recently, there were large transaction fee payments on the bitcoin and Ethereum blockchains. This analysis looks at how a bitcoin network user paid $3 million as transaction fees. We will also look at the potential remedy for such errors.
Antpool to Refund $3 Million Fee
AntPool, a bitcoin mining pool, has promised to refund the $3 million transaction fee it mined on 23 November. Nevertheless, before it processes the refund the owner should verify his/her identity. One bitcoin network user made an error by paying 83.65 BTC as fee when he/she sent 55.77 BTC.
Before that transaction, the wallet had 139.42 BTC ($5.2 million) and the 55.77 BTC which the user sent had a market value of $2.1 million. Considering that the normal gas fee ranges between $2 and $20, it means that the transaction fee was around 120,528 times greater than normal. The previous highest transaction fee was the $500,000 which Paxos paid in September.
The $3 million fee processed during block 818,087 has become the largest gas fee, for a single transaction, in the history of the bitcoin blockchain when denominated in US dollars. After noticing the large transaction fee, the AntPool control temporarily froze it.
The user who processed the transaction can verify his identity using a special signing tool such as Electrum or Bitcoin Core, the most popular software s for the bitcoin protocol. It should use the private key of the wallet that sent bitcoin. AntPool requires the user to provide the payment confirmation by 10 December 2023.
Read also: What are Bitcoin Improvement Proposals (BIP)?
The Hack Claim
After the gas fee payment error there was confusion as a certain user claimed that his/her wallet was hacked while he/she was processing a transaction, resulting in the inflated payment.
This user claimed that after transferring 139 BTC to a cold wallet, the transaction was then hacked. As a result of the hack claim the AntPool security control froze the funds.
The X user, 83_5BTC, said, “It was my BTC that paid the high fee. I created a new cold wallet, transferred 139 BTC to it and it got transferred out to another wallet immediately. I can only imagine that someone was running a on that wallet and that the had a weird fee calculation.”
According to Mononaut, the operator behind mempool space bitcoin explorer, the wallet was generated from bad entropy, meaning that the security of the wallet was compromised due to weak randomization.
Mononaut stated, “The most likely explanation is that the wallet was generated from bad entropy - perhaps a brainwallet, or too few dice rolls/coin flips, or an insecure PRNG. Let this be a reminder not to take shortcuts with your entropy, and ideally to use multisig for very large sums.”
It added, “If it was a low-entropy wallet, perhaps multiple attackers were competing to steal the funds? Since the wallet is compromised, this message could have been signed by either the victim or attacker (or anyone else who brute-forced the bad entropy.”
With this, a verification using the private key of the sending address is required as proof of the transaction. However, If this user’s hacking claim is true there is a need for another verification method rather than a message from the wallet address with the private keys used to process the transaction.
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Recent Ethereum/BTC Fee Errors
The above transaction fee error was not the first one in the history of the blockchain. Similar crypto fee errors occurred in the distant and near pasts.
For example, in the fourth quarter of 2021 DeversiFi paid a transaction fee of $23.7 million in a single transaction. Similarly, in September of the same year, Bitfinex Crypto exchange paid $24 million to send $100,000 on the Ethereum network.
Nonetheless the miner refunded the funds. These errors are referred to as “Fat-finger” trades as they are caused by human error when entering figures on the blockchain.
We also have recent examples of crypto fees mistakes. An example of a BTC fee error occurred on 10 September 2023 when Paxos, a crypto services provider, paid 20 BTC, worth about $510,750 as gas fee for a single transaction. However, this was not a fat finger trade as the problem emanated from PayPal’s management .
Mononautical posted the following comment on X, “All evidence now points to a software bug like this as the cause of the error. I really feel for the developer who wrote that code - it’s such an easy mistake to make, and it should have been caught in review.”
It added, “In reality, the was apparently running completely unmonitored, since PayPal didn’t notice or halt withdrawals for almost 24 hours.”
One way of preventing fat finger trades is through using multisignature when processing crypto transactions.
Conclusion
Although not very common, crypto fees mistakes may cost users their fortunes as they may wipe away digital assets from their wallets. Since fat fingers are a result of human errors crypto users should be extra-careful when processing crypto transactions. Paxos’ 20 BTC payment was the biggest BTC fee error for 2023.
