ViaBTC auctions 'epic sat' after mining Bitcoin's halving block and holding back rewards

Bitcoin mining pool ViaBTC is auctioning the "epic sat" after mining Bitcoin's fourth halving block on Friday and setting aside 40.75 BTC +6.26% ($2.6 million) in rewards.

"The auction for Sat 1,968,750,000,000,000 — 1 of only 4 epic sats in the Bitcoin ecosystem — has officially begun!," ViaBTC posted on its official X account earlier on Tuesday. "We're thrilled to partner with [crypto exchange] CoinEx Global for this monumental event."

Bids are placed in bitcoin, beginning at 1 BTC, with the current highest being 1.6 BTC ($106,000) after just eight bids so far. The auction ends on April 25 at 4 p.m. UTC (12 p.m. ET).

The first satoshi mined in the first block of each halving epoch is dubbed an "epic sat" due to its potential collectible value via the Ordinals protocol.

The Bitcoin Ordinals protocol, launched in January 2023 by Casey Rodarmor, offers a way to store and trade digital content on Bitcoin. By using satoshis, the smallest units of bitcoin, users can inscribe NFTs, BRC-20s (fungible tokens similar to Ethereum's ERC-20s) and other arbitrary data directly onto the Bitcoin blockchain, with each piece becoming a unique tradeable asset.

"Under the Ordinals protocol, each satoshi is allocated a unique sequential number based on its mining timestamp, enabling precise tracking and transferability of individual satoshis," the CoinEx auction page explains. "As periodic events occur within the Bitcoin network, some more frequently than others, scarcity is naturally promoted," it argues.

"This auction features one of the only four epic 'Rare Satoshis' within the entirety of the Bitcoin ecosystem. Acquired Rare Satoshis can be collected, transferred, or sold to others via alternative means," it adds.

However, several Bitcoin community members have cast doubt over the existence of "epic sats," given bitcoin's fungibility — meaning that satoshis should be interchangeable and indistinguishable from one another in terms of their value.

Mining Bitcoin's halving block

ViaBTC is one of the top five Bitcoin mining pools, accounting for 10% of the network's total hash rate over the past few days, according to Hashrate Index. Halving block 840,000 was mined by ViaBTC at around 0:09 a.m. UTC on April 20 (8:09 p.m. ET on April 19), as miners' block subsidy rewards dropped from 6.25 BTC to 3.125 BTC.

As well as receiving the 3.125 BTC ($200,000) subsidy reward, ViaBTC also collected a further 37.63 BTC ($2.4 million) in transaction fee rewards for the block amid a spike in activity related to the hype surrounding the launch of Runes at the halving. This made it the most valuable block in U.S. dollar terms in Bitcoin's history, aside from a block containing an accidental $3.1 million fee in November 2023.

Runes, also developed by Rodarmor, is a new fungible token standard for Bitcoin, offering a more efficient solution for "etching" (creating) tokens on Bitcoin compared to BRC-20 tokens that use Ordinals inscriptions.

Confusion over missing block rewards

Rewards are typically distributed among a pool's members in proportion to their hash rate shortly after mining a block. However, after mining the halving block, ViaBTC transferred the total 40.75 BTC ($2.6 million) in rewards to a fresh address, according to on-chain data, where it currently remains.

On Sunday, users on ViaBTC's official Telegram channel began asking why they could not see any bitcoin payout records for the halving block on their dashboard, TheMinerMag previously reported. A ViaBTC representative stated that the rewards "are still being processed and will be completed as soon as possible," without confirming its plans.

On Monday, ViaBTC then asked the community on X how they should handle the epic sat. "With the fourth halving event done, we're thrilled that ViaBTC scored 'Epic Sat'! How do you think we should handle it? Share your thoughts with us!," it said.

Last week, Foundry USA Pool, the largest Bitcoin mining pool by hash rate, said it planned to distribute profits to its members if it mined the first satoshi after the Bitcoin halving. "We've taken the steps to isolate the epic sat if Foundry USA Pool does mine this block, and we will make reasonable efforts to monetize it and distribute 100% of the proceeds to our pool members," the team said at the time.

It is still not clear how ViaBTC intends to distribute the funds following the epic sat auction. ViaBTC did not respond to a request for comment from The Block.