[2018-06-29] ‘Whale’ Moves 48,000 BTC for 4 Cents in Fees As Scaling Solutions

[moriskarlov]

The development of scaling solutions, along with a decrease in Bitcoin transaction throughput, has allowed for Bitcoin fees to drop under a dollar. A Bitcoin ‘whale’ utilized these dropping fees, moving 48,000 Bitcoin for just four cents.

$290 Million Transaction for Four Cents, Where Else Can You Do That?

Bitcoin fees were the talk of the town in December 2017, as Bitcoin fees briefly reached $50 when the network confirmed nearly 400,000 transactions each day. Since then confirmed transactions have halved, dropping to an average of 200,000 transactions on a daily basis.



This decrease in transactions has allowed for Bitcoin’s mempool to clear, as the network became clogged with transactions in the latter half of 2017. According to info aggregated by popular cryptocurrency infrastructure firm, Blockchain, the number of transactions waiting for confirmation has dropped by over 95%, from an average of 100,000 to 5,000.

It was widely speculated that Bitcoin’s critics, hell-bent on ruining Bitcoin’s credibility and reliability, purposely inflated Bitcoin transaction fees. These critics reportedly filled up Bitcoin blocks with ‘spam’ transactions, using the Bitcoin network for no real purpose.

However, others observed that the exponential increase in transaction fees was also due to the growth in the interest of Bitcoin, with retail consumers looking to transact value using the ‘flavor of the month.’

A whale, unidentified at the time of writing, has proved this point, paying four cents of fees for the transaction of over $290 million worth of Bitcoin. The transaction occurred late last night, with the Bitcoin user moving 48,500 Bitcoin for mere pennies, a far cry from the fees of late 2017. The ‘Whale’ paid 0.00000675 Bitcoin in fees, offering a rate of 3 satoshis per byte of transactional data.

It came as a surprise to some that a user with such a large amount of cryptocurrency holdings would pay fees well-below the rate suggested by Blockchain, at around 5 satoshis per byte.

A Twitter user, with the handle, @martybent, said:

“Can you imagine trying to move $300M for $0.04 using the traditional banking system? No, no you can’t.”

However, users have sought for more, looking for ways to decrease transaction fees to the bare minimum, while increasing Bitcoin transaction throughput limits. This search has signaled the development of Bitcoin scaling solutions, pertinent to the future success of this world-changing network.

See more - https://www.newsbtc.com/2018/06/28/whale-moves-48000-bitcoin-for-4-cents-in-fees-as-scaling-solutions-develop/

[Vitkore]

It seems the whale has the same intent to save transaction as me. I usually pay the least transaction fee.

[1Referee]

People have to put things into perspective here. Technically, which does depend on the time of the day and how many unconfirmed transactions there are, you can get first, or guaranteed second block confirmations with just $0.01 in fees.

The priority of the transaction is important here. If a whale or whoever it is wants to move $300 million in coins to seal a deal, you expect them to significantly overpay in fees just to make sure they get a first block confirmation. Even if the current fees are like $0.01, you want to bump up your fees to at least $5-$10 in order to make sure of that. You can better lose $5-$10 in fees than to lose $3 million in value because the price drops while your transaction could have been confirmed already.

I have sent numerous transactions in the last days with fees severely under $0.01 and they were confirmed within 3 blocks. Priority makes the fees.

[Lieldoryn]

I have always traveled using bitcoin XRP. Transactions through this coin is also very cheap. This is certainly not 4 cents but the cost is also below one dollar but the trading volume and reliability of the asset is much more. I hope the miners will understand that the constant growth of prices for the transaction will not bring them income and after the price of bitcoin will increase we will not see the prices that were in December 2017.

[buwaytress]

People have to put things into perspective here. Technically, which does depend on the time of the day and how many unconfirmed transactions there are, you can get first, or guaranteed second block confirmations with just $0.01 in fees.

The priority of the transaction is important here. If a whale or whoever it is wants to move $300 million in coins to seal a deal, you expect them to significantly overpay in fees just to make sure they get a first block confirmation. Even if the current fees are like $0.01, you want to bump up your fees to at least $5-$10 in order to make sure of that. You can better lose $5-$10 in fees than to lose $3 million in value because the price drops while your transaction could have been confirmed already.

I have sent numerous transactions in the last days with fees severely under $0.01 and they were confirmed within 3 blocks. Priority makes the fees.

Yeah, the other perspective is the price of Bitcoin. Those $50 fees people were talking about? That's when BTC was $19.5k, more than three times today's price. It's really the equivalent of $14 today. Still a lot, of course, but still a killing in savings if moving anything more than 0.25 BTC (in dollar equivalent) over any other payment method.

I mean, if Bitcoin eventually becomes $1 million, even a 1 sat/byte fee on my smallest input now would still be a dollar and change. By that time, perhaps we'll have near zero fees with LN, so it won't matter. It's all perspective, it's all context.

But yeah, I've been saying for 2 years now, where else can I send money anyone in the world would accept, this cheaply?

[darkangel11]

Still I find it strange that people were pumping the price so much even when the network was bottlenecked and transactions costed $20 on the average. There was a lot of transactions despite the cost and a lot of buying on exchanges. Now transactions are much cheaper and much faster, but we're at a 70% loss.
Tell me again that markets are predictable.

[1Referee]

Those $50 fees people were talking about? That's when BTC was $19.5k, more than three times today's price. It's really the equivalent of $14 today. Still a lot, of course, but still a killing in savings if moving anything more than 0.25 BTC (in dollar equivalent) over any other payment method.

Important is the fact that the nature of the insane peak in fees wasn't just caused by the price and the hype, but the massive spam attack that was going on at that point. On one side it was an attempt to discredit Bitcoin for being slow and expensive, and on the other side it were miners exploiting and damaging this ecosystem for their own gains.

If miners weren't spamming and letting the difficulty jump up and down, which significantly affects the block times negatively (block times were +15 minutes at some point!), the transaction fees would probably halt somewhere around $15-$20 at peak. Admittedly, that's still far too high, but block space is not free, people need to understand that.

Even BCash block space isn't free. Try sending a bunch of transactions without any fees. 32MB blocks and they will blatantly ingore your transactions till a 'neutral' pool feels sorry for you and confirms them.

[Oilacris]

I have always traveled using bitcoin XRP. Transactions through this coin is also very cheap. This is certainly not 4 cents but the cost is also below one dollar but the trading volume and reliability of the asset is much more. I hope the miners will understand that the constant growth of prices for the transaction will not bring them income and after the price of bitcoin will increase we will not see the prices that were in December 2017.

Comparing Bitcoin to XRP is not relevant at all.Yeah it do have also under a dollar fee but it wont really be similar because we do know on what BTC had achieved. Regarding on the news that whale is confident enough to make such transfer. If i do have those funds i would still hesitate to make such transaction. Its great to see and this is a good thing where those haters of bitcoin in the past will definitely change up their perception towards it. We do have seen increase in fees but now its quite understandable that fees would be less due to less transactions in the network.

[TraderTimm]

XRP is a centralized shitcoin, and its owners have at least 63% of its float. They have at least five centralized Ripple servers -- you can run your own, but because of how its designed, no one will trust you, so they all default to the main servers/nodes anyway.

As for Bitcoin fees, there was an extensive Fan-in/Fan-out attack that was carried out during that time last year. It wasn't just transactions, there was way more going on behind the scenes. It has been speculated but not conclusively proven that the same people dragging their heels on Segwit, Roger Ver and Jihan Wu, were the primary culprits. Some transaction analysis points in that direction - and it wouldn't surprise me that the biggest Douchetarians in crypto were responsible.

But now, with Segwit and Lightning, we can put that to rest -- and Roger Ver knows it, which is why he has changed tack and has been trying to discredit the Lightning network by any means possible.

It isn't all bad, as there seems a new team is going to "stress test" BCash and potentially fork it out of existence -- make it so any "official" wallets won't work anymore -- remember, in a 51% attack, you can create new consensus rules and everyone has to play ball.

This should be happening sometime in July, and it will be quite amusing to see the fallout.

We just might hear the rage-implosion all the way from Tokyo/China.

[hatshepsut93]

As for Bitcoin fees, there was an extensive Fan-in/Fan-out attack that was carried out during that time last year. It wasn't just transactions, there was way more going on behind the scenes. It has been speculated but not conclusively proven that the same people dragging their heels on Segwit, Roger Ver and Jihan Wu, were the primary culprits. Some transaction analysis points in that direction - and it wouldn't surprise me that the biggest Douchetarians in crypto were responsible.

I don't think that the huge fees that we had last year were solely caused by attacks, because the trading volume was huge, people were massively buying and selling coins and moving them between exchanges, and at those prices $50 fee is quite reasonable for someone who is moving 5-6 figures. This is not to say that there was no attacks at all, there is some correlation with Bitcoin's mempool/fees and Bcash volume/prices, which suggests an attack.