Interest in the Bitcoin blockchain’s ability to process hugely valuable BTC transfers for negligible transaction fees has been renewed recently after it emerged several multi-million dollar transactions have been processed for less than a dollar.
The latest of these transactions, which totals almost $450 million, occurred yesterday for a tiny fee of $0.25. The origin or recipient of the BTC is unknown at this point.
Twitter account ‘Bitcoin Block Bot’ alerted Bitcoin users that 51,511 BTC, worth around $445 million, had been moved on the blockchain on January 19.
Whale alert! 🐋 Someone moved 51,511 BTC ($445M) in block 613,644 https://t.co/ykVCeXiTBl
— Bitcoin Block Bot (@BtcBlockBot) January 20, 2020
Users immediately noted the low transaction fee, comparing it to the huge cost of processing such a transaction through traditional banking providers.
The value of the transaction fee is so small in comparison to the amount transferred that, without using scientific notation, it is effectively zero percent.
The sender used the SegWit network for the transaction, saving 30% on fees from the normal BTC network.
However, Bitcoin block explorer Blockstream pointed out that the fee could have been even smaller. The company estimated that the sender could have saved an extra 16% had they opted to use SegWit-Bech32.
Large transactions for tiny fees
On January 16, Coin Rivet reported that more than 123,000 BTC was moved in a single transaction by crypto exchange Bitfinex, who sent the colossal $1.1 billion in funds to a cold storage address for just $0.49.
A similar transaction was also successfully processed in November 2019, with a whale moving 44,000 BTC, around $300 million at the time, for just $0.32.
Unfortunately, fees this low are only available to huge transactions, and the percentage transaction fee to send smaller values of BTC is considerably greater.
Many Bitcoin users are hoping that the Bitcoin Lightning Network will significantly reduce fees associated with smaller or micro Bitcoin transactions and make the network feasible for use as a form of digital cash rather than a store of value.
Bitcoin Cash (BCH) founder Roger Ver has frequently criticised the original Bitcoin network’s ability to facilitate low-cost micro transactions, which was the basis of founding BCH as a functional digital currency for everyday payments.
Ver has previously threatened to sell all of his Bitcoin holdings if the block size is reduced to 300KB in an attempt to make the network more user friendly, calling the move “absolute insanity“.
You can read more about Bitcoin scaling solutions and transaction fees here.