Category: Bitcoin

In a surprising chain of events, Etherchain, an Ether Mining Pool, received $2.6 million in fees for a string of abnormal transactions. Even though several people came forward claiming the amount, none of them could provide the specific details of the transactions or a valid signature to prove they are the legitimate owner of the money. As a result, the company published a Tweet on June 15 in which it declared that it plans to distribute the amount among the miners who were the part of that particular block.

The company justified the decision by saying that considering the size of the amount, the four days waiting period is sufficient for the owner to come forward and claim the money. The developers of Core Ethereum, however, had an opposing point of view on the matter. The developers, Peter Szilagyi and Vlad Zamfir criticized the decision of Etherchain saying that if the pool is seriously considering giving the money back to the miners, they should wait at least for a month or two.

Etherchain clearly stated further that if such an event is to occur again, the money would be automatically distributed among the miners participating in the concerned block. It gives out a somewhat misleading picture that Etherchain might not be too interested in refunding the money to the real owner in the first place. As per the current price of Ethereum of around $223, the fee amount of $2.6 million received by Etherchain adds up to be the block reward for a day on Ethereum.

However, the fee amount is not evenly distributed across the entire Ethereum network because, as per Etherscan, the Ethermine pool only controls 21 percent of the hash rate. So, the miners belonging to that particular block for which the fees were received can expect around money equivalent to mining for five days.

PeckShield, a well-known Chinese analysis firm, deciphered that hackers may be behind this mishap. As per their theory, the hackers may have gained complete control over an exchange but were unable to withdraw the amount due to the departmentalization of keys. Thus, the only option they had was to send money to any of the white-listed addresses. However, PeckShield did state clearly that hackers may have intended to just waste the money by setting such ridiculously high fees.

It is also suggested that this instance may be a part of an elaborate ransom strategy by hackers. Theoretically, the hackers may ask to get paid to stop such misdirected transactions from occurring again in the future. If that is really the case, then for this particular case, the decision of Etherchain has sealed the fate of received money. One other theory suggested that the APIs may be malfunctioning, causing a replacement in the ‘gas’ and ‘amount’ field. However, experts suggest that it cannot be the case as the fee amount is received in three similar transactions. It denotes that the transaction wasn’t abrupt but controlled.

As of now, this entire event has become an enormous mystery, and there are no ways to unfold it until the real owners come forward to claim it with valid signatures. Even when most Ethereum mining pools are reputed and have goodwill in the crypto market, no takers are coming forward. The Core Ethereum team, as well as Etherchain, hopes that this would be the first and last such mystery to surface as the dynamics can change in ways more than one if something like this is to occur repeatedly.