F2Pool has returned the 20 Bitcoin (BTC) mega-fee to Paxos

The F2Pool mining pool has decided to return the approximately 20 Bitcoin (BTC) mega-fee paid to Paxos a few days ago. 

This was a curious voluntary decision, since they were not required to return it at all. However, probably to maintain good relations with crypto operators, they decided to deprive themselves of more than half a million dollars they earned honestly. 

The 20 Bitcoin (BTC) mega-fee: F2Pool returns it to Paxos

This story begins on 10 September, when within the 807,057 block that had just been mined on Bitcoin’s blockchain was included a transaction that had paid the miners a reckless 19.82 BTC fee. 

There was no logical reason why anyone should have had to pay such a high fee, amounting to about $510,000, so much so that it was immediately thought to be a mistake. 

It is sufficient to consider that it was enough to pay even less than one thousandth of 19 BTC to have the transaction placed in the first available block, so that amount was far from justified. 

Especially since it was a transaction of only 0.07 BTC, for which it was simply absurd to pay such a high fee. 

Initially it was not clear who had made that mistake, but then PayPal’s name popped up at first. 

In fact, PayPal has not only been offering crypto services for almost three years now, but recently announced the launch of its own stablecoin in cooperation with Paxos. 

It later emerged that the transaction in question had been carried out by Paxos itself, which had even admitted it publicly. 

Since this is all information that anyone can independently find on Bitcoin‘s blockchain, it was certain that it was Paxos that had made that mistake and paid so much only by mistake. 

F2Pool’s restitution of the excessive Bitcoin fee to Paxos

The miner who collected that 19.82 BTC fee had been the one who confirmed the 807,057th block.

It was actually not a single miner, but a pool, one of the largest in the world: F2Pool. 

The identity of the miner, on the other hand, was known early on, because they often leave within the block a clear and unmistakable clue to their identity. 

When it became known that the mistake had been made by Paxos the mining pool began to consider returning the overpaid fees. 

It is worth mentioning that F2Pool had no obligation to Paxos, and that those 19.82 BTC fees collected on a single 0.07 BTC transaction were earned in a totally legitimate manner. 

However, the pool preferred to make the decision to return them to the sender, and it did so today. 

One can clearly see the 19.82 BTC sent to the same Bitcoin address that had paid them as fees. There are now 455 BTC stored on that address. 

The high fee

It is worth noting that F2Pool returned in full the fee paid by Paxos, without deducting, for example, the average fee amount of the other transactions included in the 807,057 block. 

Then again, the average fees per transaction in this block were only 0.07 thousandths of a Bitcoin, excluding Paxos’s erroneous one, so it would have actually made little sense to do this calculation. 

Average transaction fees have been above $1 for a few days now, with a recent high of $2.25 last week. 

In July there was a daily peak above $4.7, and in early May there was a really anomalous daily peak at $31, caused by the Ordinals boom. 

Usually, the average fees per transaction on Bitcoin’s blockchain are not particularly high, but they’re not super low either. 

Nowadays, however, those who want to pay very low fees can use Lightning Network, which, moreover, also allows virtually immediate transactions. 

For example on the Ethereum blockchain, which is now no longer based on Proof-of-Work but on Proof-of-Stake, they are almost constantly above $2, and often approaching $4. The peak in May, however, was $27. er

The irreversibility of transactions

Cryptocurrency transactions on decentralized networks are effectively irreversible. That is, there is no one who can intervene to undo or cancel them once they are confirmed. 

When such things happen, the only possible alternative to leaving things as they are is to go directly to the person receiving the tokens. 

Sometimes it can also be very difficult to figure out who received them, whereas in this case it was quite obvious since inside block 807,057 it blatantly said that the miner was F2Pool. 

But even knowing who received them, the only hope is to convince them to send the funds back by making a new transaction. 

In fact, Paxos’s transaction within block 807,057 was neither removed nor changed, simply because no one can do that. F2Pool had to make a new transaction, then inserted into block 807.732 (also mined by F2Pool), to send back the 19.82 BTC received. 

So from the Paxos address with which the transaction with incorrect fees was made, 19.82 BTC was effectively subtracted, and the fee was neither removed nor changed. However, later the same address received 19.82 BTC from F2Pool with a subsequent transaction.