TL;DR
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On the Bitcoin Network, when you submit a transaction, a bunch of independently owned computers compete to win the right to process it. After it’s processed, the winning computer gets a 6.25 BTC reward plus a transaction fee.
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When you’re sending a transaction, you can offer a higher fee to try and get your transaction to process faster…and instead of offering a $5-$20 fee, like a normal person, an employee at the Paxos Crypto Exchange (accidentally) offered a cool $500,000.
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The miner responded in the most Web3 way possible – put it to a vote (on Twitter/X).
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Want to see the results? Click here.
Full Story
Imagine you’re buying a fancy new laptop. It’s $2,000.
You swipe your card, the payment goes through, you walk away happy.
But then you check your account, only to find out that your $2,000 transfer of funds came with a $500,000 fee.
A similar scenario just played out on the Bitcoin network.
Here’s the ‘how’ and ‘what’ of it all…
On the Bitcoin Network, when you submit a transaction, a bunch of independently owned computers compete to win the right to process it. After it’s processed, the winning computer gets a 6.25 BTC reward plus a transaction fee.
That last bit (the fee) is what’s important here.
See, when you’re sending a transaction, you can offer a higher fee to try and get your transaction to process faster…and instead of offering a $5-$20 fee, like a normal person, an employee at the Paxos Crypto Exchange (accidentally) offered a cool $500,000.
(Oooft!).
The miner who received the fee figured it was a mistake and made an offer in good faith, passing the vibe check by allowing 3 days for a total refund to be claimed.
…but the deadline passed without a claim.
In fact, it wasn’t until yesterday that Paxos caught the mistake and asked ‘hey, um, could we maybe, er, get an extension on that offer?
The miner responded in the most Web3 way possible – put it to a vote (on Twitter/X).
They gave 4 options:
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Refund Paxos 20 BTC as is
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Distribute it to miners
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Go fifty-fifty
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Just freeze it
At the time of this writing, there’s three hours left on the clock – but by the time you’re reading this, it will have been decided.
Want to see the results? Click here.
