Crypto’s Too Expensive? Binance Sent $600 Million in Bitcoin for Just $7

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Crypto exchange Binance has been moving bitcoin funds to cold storage the past couple of days, and, of course, such large transfers don’t go unnoticed.

Two transactions destined for Binance’s cold wallet come to the fore and demonstrate both the power and irony of the blockchain. A transaction in block 550211 was a transfer of just over $1 million. For this transaction, Binance paid just over $8 in fees. The “high” amount of the fee is probably a matter of convenience, as the transaction was not particularly large at just 1550 bytes.

The other transaction, first flagged by Antoine Le Calvez of CoinMetrics.io,  is more notable for its size — $600 million at the time it was sent, making it the largest unspent transaction output existing today — but also illustrates the irony of Bitcoin transactions, whose fees are not based on the amount transacted but instead the amount of computer resources required to store the information. This second transaction, made in block 550155 several hours earlier, comprised 5981 bytes yet cost the giant exchange just over $7.

Source: blockchain.com

Other factors, such as network activity, apply to transaction fee calculations.

Contrast With Traditional Transaction Movement

It should first be noted that there is no banking product with the same security as a cold storage wallet. A cold storage wallet is one that is not connected to the blockchain via the internet. With appropriate security hygiene, it can amount to having direct access to your personal fortune with no middlemen.

It would take days or weeks to find out the cost of moving funds between bank accounts from various banks, and banks are in particular not the best thing to compare Bitcoin with, it being primarily a remittance tool. Nonetheless, it is known that interbank fees generally run in the neighborhood of 4 percent or more, supposing the funds were being moved internationally. Domestically there would still be fees, which would depend very much on the bank being used.

Banks using Ripple‘s enterprise DLT products and other blockchain technologies might be able to reduce the cost significantly. Likewise, one-time deposits and other deals can be made with banks when moving this amount of funds. But this is cold storage, after all – funds that Binance will later probably need access to. The notion of paying any more than necessary fees for access or movement, and being reliant on external forces, is antithetical to the business of being a cryptocurrency exchange.

Which is to say, Binance is engaging in money transfers that wouldn’t have been possible in a previous era in order to facilitate a business model that wouldn’t have been possible in a previous era, all at a cost that would have been unimaginably low in a previous era.

We find it helpful to compare the cost of these transactions with a service like PayPal instead. While it’s unlikely that Binance would work with PayPal or that PayPal would work with transactions of this size, it’s useful to compare the value of Bitcoin to other remittance models. According to Salescalc.com, which specializes in such data, a fee of $17,400,000.30 would be incurred moving $600M to the PayPal account of the “cold storage steward” in the theoretical case of a PayPal model. PayPal does not charge fees for moving funds to bank accounts, but there is an associated delay when using traditional banking models.

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Heat Your Home or Business With a Mining Rig

Bitcoin mining uses a lot of energy to power the processors, which in turn generate a lot of heat. We also use a lot of energy to heat up our living and working environment. If only we could combine… oh, hang on.


Heatmine

The precise level of harm that bitcoin (BTC) 00 mining exacts on the planet seems to be endlessly debated. Although pretty much everyone can agree there is a benefit in reducing the energy consumption required, whatever that may be. But if that isn’t an option, then there are other alternatives to increase the efficiency.

Canadian mining company Heatmine is based in Quebec where the majority of energy already comes from renewable sources. That didn’t stop it from trying to make the process even more environmentally friendly, by harvesting and re-using the waste heat.

3.2 GB Block Sizes: Developers Bash Bitcoin Climate Change 'Fake News'

Hot Water

The company’s first foray into heat recycling was in its own warehouse, using excess heat from its mining rigs to heat the water. As Quebec has a cold climate for about 10 months of the year, Heatmine developed this system to enable mining rigs to be deployed remotely, where heat is needed.

A recent pilot scheme entailed installing the Heatmine devices in a local greenhouse growing strawberries. Heating costs reduced by 75-100%, meaning the growers were able to compete with imported strawberries from warmer climes.

Heat Mine!

Heatmine is now taking applications from homes and businesses hoping to join the scheme. A Heatmine rig installed outside a house can heat several rooms and an outdoor swimming pool, according to its website. Or the company can install multiple units to cover a larger area. Each machine can provide 75,000 BTU per hour, which can heat an area up to 300 sq. m.

Heatmine plans to continue expansion through Canada, and also look at areas of the US which have cheap electricity and are generally cold.

While longer-term solutions to bitcoin’s energy consumption will have to evolve, this is one small way to offset some of the carbon footprint generated today.

What are your thoughts on repurposes mining heat, as well as Heatmine’s plans in Canada? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock.

DASH Sent Three Million Transactions in a One-Day Stress Test

Cryptocurrency networks are mainly used to send financial transactions. The capacity at which such transfers can occur helps shape the future of individual projects. For Dash, its recent “stress test” proved to be quite successful. Over 3 million transactions were recorded with relatively minor issues reported. A very big milestone for the altcoin network.


The Latest Dash Stress Test

In the cryptocurrency world, stress tests are an important aspect. Although these periods heavily inflate the number of transactions, they also test the network’s resolve. Processing more transactions is an ongoing development for all major cryptocurrencies. Most projects beat Bitcoin in this department with relative ease. The latest to do so is Dash, an altcoin popular among privacy-oriented users.

The stress test was conducted earlier this month, during which over three million transactions were completed in a 24-hour period. A different stress test in July of 2018 saw barely 464,000 transfers achieve a level of completion. This further confirms a lot of progress has been made by the developers in recent months. This news comes at a most opportune time for the altcoin.

Bitcoin Cash, prior to forking a few days ago, conducted a big stress test in September. That venture saw 2.1 million transfers complete in a 24-hour period. Dash’s latest numbers improve upon this number by nearly 50%. It is a major milestone for this altcoin, though there is still room for future improvements. Because of these results, Dash is – in an ideal world – one of the most competitive cryptocurrency networks.

Other Key Results of Note

Every cryptocurrency stress test is about more than just the number of transactions. In the case of Dash, negative network impact was minimal during this period. Network nodes did not see any major changes in terms of resources. At the same time, some masternodes were unable to cope with the demand. This is primarily due to memory and space requirements not being met. Masternodes are run by individual users and require decent hardware to survive this mass throughput.

This further confirms that masternode owners need to beef up their hardware. A fair few nodes are hosted on a VPS coupled with a “cheaper” hardware plan. Setting up a masternode on a computer under one’s control is usually the better option. Especially if Dash’s transaction throughput continues to grow over the coming years.

Several days after the stress test, another scaling improvement was presented. InstantSend, a feature native to Dash, can scale in a significant manner. The potential “limit” of this feature depends on the number of active masternodes. For now, the theoretical maximum of InstantSend transactions cannot be fit into all network blocks. This further confirms a bright future lies ahead for Dash. Scaling remains an ongoing struggle for all cryptocurrencies.

What do you think of the results of Dash’s latest stress test? How does it compare to the recent Bitcoin Cash stress test? Let us know in the comments below.


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