Questions Amid Mysterious High-Fee Transactions on the Ethereum Blockchain

News surfaced online a few days ago about a Chinese miner who allegedly spent $2.6 million on a transaction fee to transfer a meagre $134 worth of ether. While the funds could be lost forever, some blockchain investigators claim that the miner must have been in some kind of underhand dealings. Perhaps it was an attempt at money laundering or tax evasion. Meanwhile, another mysterious high-fee transaction has surfaced, resulting in a further $2.6 million in mining fees. This brings the total amount to a massive $5.2 million. Both transactions were spread over two mining pools: Sparkpool and Ethermine Pool.

Distributing the amount to hash contributors

Ethermine is deliberating on plans to distribute the amount to hash contributors after a 4-day hold awaiting any claims. Sparkpool, on the other hand, has a further investigation pending.

Bitfly manages the Ethermine pool that initially validated the frozen transaction. While the hold could have annoyed several hash contributors-Bitfly was quick to clarify its policy action was one-off. In addition, the blockchain pool said it would always distribute full block rewards based on their payout policy from now on.

“Our advertised payout policy is to always distribute the full block reward and we will be sticking to that independent on the amount involved.”

Meanwhile, experts believed that the sparkpool high-fee transaction was the result of potential bugs triggering automatic execution. However, the succession of yet another disproportionate transaction led the community to reconsider more possibilities. Nevertheless, the investigators are still analyzing the first transaction.

In a report, a blockchain research firm indicated that the mysterious transaction could be cyber criminals rethinking their strategies. In fact, the research indicated that it was a phishing attack on some undisclosed crypto exchange. Blockchain analysts, however, raise concerns that blockchains should reject high-fee transactions; in the same way that they reject low transaction fees. In 2017, at least 50 bitcoins were paid for a 10 bitcoins transaction. Such a limit would, at least, prevent such occurrences.

Richard M Adrian: Blockchain Analyst, Editor, Sales Copy Writer, Technology Journalist and Blogger