bitcoin cash

A miner has successfully recovered more than $600,000 worth of bitcoin cash mistakenly sent to SegWit addresses, and he or she intends to return the coins to their rightful owners — for a fee.

The decision to fork away from the main bitcoin blockchain and create bitcoin cash grew out of a yearslong debate about the appropriate way to scale Bitcoin. However, the timing of the fork was related to the impending activation of the Segregated Witness (SegWit) upgrade on the main network.

Consequently, the Bitcoin Cash network has not upgraded to SegWit, and bitcoin cash transactions get stuck when individuals mistakenly send them to SegWit addresses. These funds can be claimed — by anyone — but the process is technical, arduous, and requires mining hardware. Mining pool had recovered 100 BCH and returned them to users, but as of yesterday more than 493 BCH — worth $609,000 — remained stuck in SegWit outputs.

Today, that 493 BCH is no longer stuck. An anonymous miner — known only by the handle “bchsegwitrecover” — revealed on reddit that he or she had successfully recovered the coins.

bitcoin cash
Source: Block Explorer

The miner struck an altruistic tone, stating that he or she had done this as a service to the community.

“Some of you may have noticed this transaction recently which spent 493.54495133 BCH that was stored in segwit outputs,” the post said. “I have taken all of these coins to help those that have mistakenly sent BCH to segwit addresses,” the post said.

Affected users can retrieve their funds by sending the miner a signed message from the address from which the coins were sent — as well as a signed message from the address from which they are recovering the lost funds — and he or she will return them to the owner. The deadline to reclaim the funds is December 5.

There’s a catch, however.

“Because of the significant effort that was required to both claim these BCH and to verify that each person is the person who should be receiving the BCH, I will be taking 30% of the BCH recovered as a recovery fee. This means that you will receive 70% of the funds that was stored with a segwit address,” the post continues.

This might seem like a steep fee. It amounts to more than $180,000 — more if some users do not reclaim their funds. However, as the funds are already in the miner’s possession, victims must choose between reclaiming 70 percent of their lost funds or losing them permanently. All things considered, they are lucky the miner is returning any coins at all.