A Bitcoin whale was spotted sending BTC 48,500 worth USD 300 million for an astonishingly low transaction fee of just 0.00000675 Bitcoin (USD 0.04) on 27 June 2018.
This is an excellent example of how at times when Bitcoin network load is low it can be cheaper to send money with Bitcoin than any other financial service. Banks would probably charge millions of dollars to send a USD 300 million transaction since they generally take a certain percentage of the total amount sent through bank wires. Western Union would cost tens of millions of dollars if it would even entertain the idea such a large transaction.
Bitcoin transaction fees are paid per byte of data, so the amount of Bitcoin being sent doesn’t have an influence on the transaction fee. Therefore, someone buying a USD 5 cup of coffee would pay the same transaction fee as someone sending USD 300 million. The higher the fee, the quicker a Bitcoin transaction is likely to confirm, however, so it is standard practice to attach a high fee when sending a lot of money to ensure the transaction confirms quickly. Technically, confirmations aren’t even needed to receive a Bitcoin transaction, like when using a blockchain.info wallet, but waiting for confirmations is a good way to protect against double spends.
At this time on 28 June 2018, it costs roughly USD 3 to send a Bitcoin transaction and have it confirm in the next block, although for less than USD 1 a Bitcoin transaction would still confirm in about an hour. This illustrates how higher fees lead to quicker transaction confirmations, which is due to Bitcoin miners favoring transactions that include higher fees. It is surprising that this Bitcoin whale sent USD 300 million without attaching a transaction fee that would ensure quick confirmation. However, when transactions completely clear out of the mempool, which happens periodically throughout the day under normal conditions, even the lowest fee transactions get confirmed.
Bitcoin transactions aren’t always this cheap. During the rally that saw Bitcoin prices hit USD 20,000, transaction fees exceeded USD 50, practically crippling Bitcoin’s usefulness as an everyday currency. Fortunately, transaction fees only remained that high for a short amount of time and normalized soon after.
However, it is possible Bitcoin transaction fees could spike like that again in the future when the next big rally occurs, leading to research on how to properly scale the Bitcoin network for mainstream adoption. Right now, Bitcoin can only handle fewer than ten transactions per second, but the second layer Lightning Network could potentially handle as many transactions as Visa once all the bugs are smoothed out.
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