Bitcoin dev says ‘fee is a fee’ about returning $510k paid by mistake

An expensive mistake of over half a million dollars sparked debates, goodwill, regrets, and controversial opinions in the Bitcoin (BTC) community recently.

It all started with the Bitcoin network fee overpayment of 19.82 BTC ($510,750) from an entity that later was revealed to be Paxos, to the lucky miner who discovered the block: F2Pool, the third largest Bitcoin mining pool in the world. This mistake occurred in block height 807057, on September 10.

Considering the average fee rate in this block, the supposed Paxos fee was overpaid 481,299 times. Block 807057 received a total of 20.013 BTC in fees, of which 99.04% came from this single transaction.

To return or not to return, that is the question

Apparently, after the mistake was made, both entities entered an agreement so the overpaid amount could be returned to the sending address.

However, Wang Chun (@satofishi), co-founder of F2Pool, started a poll on X on September 13, showing regret about the previous agreement after the other party supposedly used “EST instead of EDT/UDC”, when talking about different timezones.

On that, the renowned Bitcoin developer Peter Todd (@peterktodd) commented that:

“Better to distribute it to the miners to make it clear that a fee is a fee. You have no obligation to give it back.”

— Peter Todd

At the time of publication, poll results show over 3,800 votes, with the leading option being ‘Distribute it to miners’ (35.2%). The second most popular choice is ‘Refund Paxos 20 BTC as is’ (28.8%).

F2Pool has been selling BTC

Data retrieved by Finbold from CryptoQuant shows a huge drop in F2Pool’s BTC reserves since the last week of August. Moving from 13.598 BTC to as low as 8.165 BTC (-40%), indicating a massive sell-off event by this entity.

F2Pool is the third largest Bitcoin mining pool, having mined over 14% of all Bitcoin blocks in the last 12 months, responsible for this same amount of hashrate to the network.