Popular crypto Twitter account Whale Alert sent out a tweet yesterday warning users that 123,447 BTC – worth around $1.1 billion – was on the move from an unknown wallet.
Whale Alert tweeted:
🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 123,447 #BTC (1,097,343,503 USD) transferred from unknown wallet to unknown wallet
— Whale Alert (@whale_alert) January 15, 2020
The Bitcoin, transferred at 11pm on January 15, prompted many Twitter users to speculate that the funds belonged to Craig Wright.
Wright has allegedly received the keys to encrypted databases which detail how much Bitcoin he holds, and is allegedly waiting for the private keys to unlock his wallets any day now.
However, it has since emerged that the massive Bitcoin whale transaction belonged to trading platform Bitfinex.
The transfer was the result of a hot wallet refill and moving other Bitcoin funds to cold storage.
Paolo Ardoino, CTO at Bitfinex, replied to Whale Alert directly, claiming that just 1,500 Bitcoins were officially moved to a new wallet, with the remainder of the funds being sent to a new cold storage address.
It's a 1.5k BTC refill of hot wallet and resulting change address movement.@whale_alert anyway this can be improved 😉
— Paolo Ardoino 🍐 (@paoloardoino) January 15, 2020
The true source of the funds is bound to be a relief to Bitcoin traders, who have been watching the Craig Wright situation with caution.
Low fees
However, what really grabbed the attention of the crypto community was the incredibly low fee associated with the transaction.
The entire $1.1 billion worth of BTC was sent for just $0.49, or 5,578 satoshis.
In November, Coin Rivet reported that another Bitcoin whale had sent 44,000 BTC, worth almost $300 million at the time, for just $0.32.
Naturally, transaction fees are usually higher than this for even relatively small transactions.
However, if the recipient is prepared to wait for their funds to arrive, sending Bitcoin with a low transaction fee can be an incredibly cost-effective way of sending huge amounts of funds.
Compared to traditional cross-border remittance services or money transfer services, Bitcoin and blockchain may provide a low-cost and virtually instant way of sending value over long distances.
Some cross-border payment providers take days to clear funds and may charge disproportionately high fees depending on the country the funds are being sent to.
Leading money remittance service MoneyGram has recently been working closely with Ripple to explore and implement cross-border payments powered by blockchain.
In November, SBI Ripple Asia announced the first cross-border payment corridor powered by blockchain had been launched between Japan and Vietnam, slashing transaction fees significantly.
You can find out more about the economics of Bitcoin transaction fees here.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.