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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Ripple Continues to Rebound, While Most Major Cryptocurrencies See Mild Wave of Red

Saturday, Nov. 17: crypto markets have seen another mild decline, with losses across the top 20 coins by market cap reaching 4 percent over the past 24 hours.

In contrast, Ripple (XRP), which is still holding strong as the second coin by market cap, continues to see sufficient gains as of press time, according to data from Coin360.

COIN360

Market visualization from Coin360

After seeing a small rebound yesterday, the largest cryptocurrency Bitcoin (BTC) is very slightly down over the past 24 hours. As of press time, Bitcoin is down less than 1 percent on the day and trading at $5,560. The major cryptocurrency has seen some volatility during the day, with its price declining to as low as $5,490, while its intraday high reached $,5,616.

According to Bloomberg’s research arm Bloomberg Intelligence, the cryptocurrency market “drama” is “just starting,” with analysts predicting that Bitcoin’s price would take a further dip to as low as $1,500. Such a decline would mean a 70 percent drop from current market levels, while Bitcoin has already lost more than 60 percent of its value over the year.

BTC

Bitcoin 7-day price chart. Source: Cointelegraph’s Bitcoin Price Index

Ripple, which overtook Ethereum (ETH) in terms of market share on Thursday, Nov. 15, continues to hold its place as the top altcoin, with a market cap of $19.9 billion, while Ethereum’s market cap amounts to about $18 billion as of press time.

Ripple is also the leader in terms of daily performance, with its price up almost 6 percent to trade around $0.49 at press time. The coin is, however, still well below its price point of $0.52 before the market dip Nov. 14.

XRPRipple 7-day price chart. Source: CoinMarketCap

Ethereum has been hovering above the $170 price point over the day, down just slightly over the past 24 hours and trading at $173 by press time.

Total market capitalization of all cryptocurrencies is slightly on the rise, recovering from Wednesday’s drop and hovering around $183 billion. Daily trade volume has continued to drop, currently amounting to $13.5 billion after reaching $25 billion on Nov. 15.

total

Total market capitalization chart. Source: CoinMarketCap

Recently, CoinShares CSO Meltem Demirors argued that one of the reasons the market has been seeing volatility this week was that institutions are “taking money off the table” in anticipation of Bitcoin Cash’s  (BCH) recent hard fork. Other industry experts agreed that the fork is causing uncertainty in the markets.

The Bitcoin Cash hard fork took place on Nov. 15, the day after crypto markets have suffered a notable decline. The update of the BCH network has caused multiple suspensions of Bitcoin Cash trading and withdrawals across global exchanges.

The protocol upgrade has divided Bitcoin Cash supporters into two groups who disagree about how the network should be updated – Bitcoin ABC and Bitcoin SV. According to BCH community-backed statistics website Coin.Dance, Bitcoin ABC is currently slightly ahead of SV in terms of hashrate and proof of work by press time.

Bitcoin Cash is seeing some of the largest losses across top 20 coins at press time, down 4.29 percent, and trading around $385 at press time, according to CoinMarketCap.

In a note to clients yesterday, Nov. 16, Wall Street analyst and cryptocurrency bull Tom Lee cut his end-year Bitcoin price target nearly in half, lowering it from $25,000 to $15,000.

Ripple’s XRP Leapfrogs Past Ethereum Marketcap by More Than $1 Billion

All cryptocurrency and digital asset projects are ranked by market cap. Bitcoin remains the top dog despite a very bearish 2018. Behind Bitcoin, Ethereum is no longer the number two. Instead, Ripple’s XRP has overtaken Ethereum in terms of total valuation. This is a direct result of the most recent market dip, although this change has been brewing for some time.


XRP Claims the Second Market Cap Spot

The year 2018 can be divided into multiple segments. On the price front, all currencies have lost tremendous value. Even this week, another big setback occurred. That affects Bitcoin, as well as all altcoins, tokens, and digital assets. A somewhat surprising side effect of this trend is how market cap rankings get shaken up. Very few projects maintain a value of over $1bn at this time.

The bigger change is how the top three ranked by market cap is no longer the same. Ethereum and XRP are both in the top three, but their places swapped. At this time, XRP’s valuation is higher than Ethereum’s. Statistics by Coinmarketcap confirm a $1.2bn gap separates both ecosystems at this time. Not an insurmountable discrepancy, yet it is a very big lead regardless. Even today, the value of XRP continues to increase slightly, whereas Ether’s value keeps dropping.

When looking at the bigger picture, this trend only becomes more apparent. Every time Bitcoin loses a lot of value, XRP seems to hold its own quite well. Ethereum appears to be closely linked to Bitcoin’s price movements in this regard. A very intriguing trend which may lead to a bigger gap between XRP and ETH moving forward. That may also indicate XRP will maintain its market cap lead over Ethereum for some time to come.

XRP Claims the Second Market Cap Spot

The Bullish News Pushing XRP Higher

Developments like these do not happen without a good reason. For XRP, there has been a string of bullish news to drive the price higher. It is only normal this affects the project’s market cap ranking at the same time. An ongoing “debacle’ between Ripple and Swift has resulted in surprising bullish momentum for Ripple. CEO Brad Garlinghouse goes as far as claiming his company’s technology can replace Swift’s infrastructure altogether.

Furthermore, the commercialization of xRapid is in full effect. Numerous service providers are integrating Ripple’s technology. xRapid’s Main purpose is to facilitate cross-border transactions. It helps reduce costs while improving overall settlement speed. The role of XRP. XRP Speculators consider this commercialization to have a positive impact on the native asset’s price as well.

In the payments space, XRP becomes more commonly accepted as well. The latest firm to offer support is Omni. This physical storage and online rental service provider lets clients pay in XRP. As more use cases become apparent, the market cap of this asset grows larger. While XRP might not rival Bitcoin in this regard, it seems to outpace Ethereum as of late.

Do you think Ripple’s XRP will hold onto the #2 spot? Let us know in the comments below.


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