To understand how the miner pulled this off, one has to travel back in time and understand the special relationship between Bitcoin and Bitcoin Cash. Bitcoin is the first network that is the first autonomous system where users can send and receive funds without a third party. The spin-off was formed on Aug 1, 2017. And the main difference is that it took the block-size increment debate as a reliable mode of improving the network’s scalability without secondary layers like Lightning Network.
Bitcoin Cash also implemented SegWit (segregated witness) on Aug 24, 2017. And this is where all these monies, a modest estimate places it at around 9,000 BCH or roughly $3 million, accessible only to miners. The initial fork and the second hard fork on Aug 24, 2017 created similar assets that shared every other detail except the nested SegWit which “look like normal P2SH addresses, but their spending script uses SegWit.”
Nested SegWit “offered an easy and backward-compatible way to onboard users to SegWit.” With time, users mistakenly sent BCH to this nested SegWit addresses. To access the jackpot, a miner needs to only know the executing script.
The bet and the effort to recover this started back in 2017. Then a Redditor noticed a worrying trend that Trezor cold wallet users were sending BCH to a nested SegWit address. Considering this, he proposed the setting up of a miner-run service to recover and re-distribute back BCH to users less a finder’s fee. The first recovery was initiated on Nov 2017 and has been going on diligently since mid-Sept 2018.
