It took two years! Mysterious miners took away 9,000 BCH that were mistakenly sent from the Segregated Witness address

Over the course of two years, an unknown miner managed to siphon off all the BCH that was mistakenly sent to a Bitcoin SegWit address, keeping the coins for himself instead of returning them to the owner, Bitcoinist reported on Feb. 26.

(Image source: flickr)

The number of BCH losses has increased since 2017

BCH had problems shortly after the hard fork in August 2017. Because its address format is very similar to Bitcoin, it has often happened over the years that BCH users have mistakenly sent coins to Bitcoin's Segregated Witness (SegWit) address, which the BCH network does not support. Over the years, as many as 18,000 BCH were mistakenly sent to Segregated Witness addresses. Since Segregated Witness addresses have only been used in the last two years, the wrong transfers mainly occurred in 2018 and 2019.

The latest data from Coinmetrics shows that some known mining pools have successfully recovered about half of the misissued BCH through coin recovery programs and returned them to the owners. But an "unknown" miner took away more than 9,000 BCH after successfully mining enough blocks. Bitcoin supporter Jameson Lopp posted the news on Twitter:

An unknown miner siphoned off nearly 9,000 BCH that was mistakenly sent to a segregated witness address (which can only be recovered on the Bitcoin network). Today, the value is over $3 million.

Coinmetrics has been tracking this issue since the beginning, when the number of lost BCH was in the hundreds. Miners like BTC.com even opened a temporary service for users to file small claims. Later, the mining pool decided to stop recovering smaller amounts of BCH and set a minimum recovery of 100 BCH, while the minimum recovery fee was 10 BCH.

The May 2019 51% attack prevented “unknown” miners from reclaiming BCH

So far, BTC.com and BTC.top are the mining pools that have recovered the most mis-sent BCH. In addition, an "unknown" miner has received at least 8,763.16 BCH in total. To recover mis-sent BCH, you must first become a miner or contact a miner who is willing to mine a block containing a non-standard script transaction. Regular users mistakenly send the required transaction type to the blockchain.

BTC.com and BTC.top once successfully blocked another attempt to reclaim the lost BCH by conducting a joint 51% attack on the BCH blockchain. This move blocked the actions of the "unknown" miners and invalidated a special block that would have allowed the miners to access the lost BCH.

Towards the end of 2018, BCH changed its address format, and since April 2019, the number of misdirected BCH has dropped significantly. Mistaken transactions can be avoided by sending small amounts of cryptocurrency to see if the address is feasible first, which can avoid huge losses. The search for lost BCH is still ongoing, and owners may find that it has become very difficult to recover small amounts of BCH.