‘Whale’ Moves 48,000 Bitcoin for 4 Cents in Fees As Scaling Solutions Develop

The development of scaling solutions, along with a decrease in Bitcoin transaction throughput, has allowed for Bitcoin fees to drop under a dollar. A Bitcoin ‘whale’ utilized these dropping fees, moving 48,000 Bitcoin for just four cents.



$290 Million Transaction for Four Cents, Where Else Can You Do That?

Bitcoin fees were the talk of the town in December 2017, as Bitcoin fees briefly reached $50 when the network confirmed nearly 400,000 transactions each day. Since then confirmed transactions have halved, dropping to an average of 200,000 transactions on a daily basis.

This decrease in transactions has allowed for Bitcoin’s mempool to clear, as the network became clogged with transactions in the latter half of 2017. According to info aggregated by popular cryptocurrency infrastructure firm, Blockchain, the number of transactions waiting for confirmation has dropped by over 95%, from an average of 100,000 to 5,000.

It was widely speculated that Bitcoin’s critics, hell-bent on ruining Bitcoin’s credibility and reliability, purposely inflated Bitcoin transaction fees. These critics reportedly filled up Bitcoin blocks with ‘spam’ transactions, using the Bitcoin network for no real purpose.

However, others observed that the exponential increase in transaction fees was also due to the growth in the interest of Bitcoin, with retail consumers looking to transact value using the ‘flavor of the month.’

 

 

A whale, unidentified at the time of writing, has proved this point, paying four cents of fees for the transaction of over $290 million worth of Bitcoin. The transaction occurred late last night, with the Bitcoin user moving 48,500 Bitcoin for mere pennies, a far cry from the fees of late 2017. The ‘Whale’ paid 0.00000675 Bitcoin in fees, offering a rate of 3 satoshis per byte of transactional data.

It came as a surprise to some that a user with such a large amount of cryptocurrency holdings would pay fees well-below the rate suggested by Blockchain, at around 5 satoshis per byte.

A Twitter user, with the handle, @martybent, said:

“Can you imagine trying to move $300M for $0.04 using the traditional banking system? No, no you can’t.”

However, users have sought for more, looking for ways to decrease transaction fees to the bare minimum, while increasing Bitcoin transaction throughput limits. This search has signaled the development of Bitcoin scaling solutions, pertinent to the future success of this world-changing network.

Scaling Solutions: Segwit and the Lightning Network

For the uninitiated, Segwit is an improvement on the Bitcoin network that changes the transaction format of BTC transactions. Segwit allows for transaction sizes to be reduced drastically, helping to reduce fees, along with allowing for an increased amount of transactions to be stored within one block.

This protocol, activated in August 2017, has already caught on with the network, as over 36% of all transactions now run on Segwit addresses.

The implementation of the Segwit protocol was vital in making sure that the Lightning Network, another popular scaling solution, could function. The Lightning Network is an off-chain scaling solution that promotes the use of Bitcoin for micro-payments. This specific scaling solution utilizes balance sheets, payment channels, and multi-sig addresses to ensure that all parties get the money they deserve. By using this system, thousands of transactions could be made per second for minimal fees, the holy grail for any cryptocurrency network.

Blockstream, leading cryptocurrency infrastructure and development company, recently announced that Lightning Network adoption has grown at a staggering rate, saying:

“Around the announcement of the Blockstream Store, the Lightning Network had a total of 46 open channels and 0.682 BTC in capacity. Today, there are roughly 7,800 open channels with 26 BTC of capacity. That is a 16,856% increase in channels and a 4,084% increase in channel capacity in 6 months!”

Hopefully, the adoption of scaling solutions can continue, as Bitcoin begins to seep into traditional financial systems, finding a place in daily commerce.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: NICKCHONG
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Cryptocurrency Prices Are Down, But Transaction Numbers Are Up

Recent cryptocurrency price declines have attracted the attention of mainstream media outlets.



Many attribute the price declines to tax selloffs, exchange hacks, ICOs, and negative regulation developments. Some have proclaimed this to be the beginning of the end, while others, such as Brian Kelly, have called Bitcoin and cryptocurrencies “not dead”. Kelly says that the USD exchange price of cryptocurrencies are entering bear market territory, but that it is also important to keep things in “perspective”. To prove his point, he rhetorically asked, “Do you know where we were a year ago?” To which he answered, “$2,500.” Brian Kelly was eluding to the fact that even though cryptocurrency prices are down over a few months, they are actually significantly up year over year.

Kelly also had a positive outlook on the regulation developments even though it has caused the USD exchange price to drop significantly. Kelly said, “They’re cleaning up the system. They’re making sure it’s more robust. Making sure it’s better for people”.



Transactions matter more than price

All the news outlets significantly focusing on the fiat exchange price seem to overlook that the goal of cryptocurrency is to be a peer-to-peer digital currency and payments system free from centralized authorities. This goal means that the fiat exchange prices does not matter that much for cryptocurrencies. Even if the price for one whole cryptocurrency is nominally large in fiat exchange rates, a diverse income demographic can still use cryptocurrencies to buy and sell everyday items since most cryptocurrencies are divisible into very small amounts, such as one Satoshi (a hundredth of a millionth BTC). This everyday usability for large and small purchases does rely on transaction fees and confirmation times remaining low. Thus, it is the number of transactions per day that matters more than the price to successfully and sustainable accomplish the goal of becoming a peer-to-peer digital currency and payments system.

The transactions per day is a better indication than price of how much cryptocurrency is actual being used by people in everyday life rather than just for speculation. The number of transactions matter since actually using a currency is what gives it value and stability as a currency. Transactions per day displays how consumers are handling that coin’s transaction fees, confirmation times, security, and merchant adoption. More transactions per day is an indication that a cryptocurrency has solid fundamentals that consumers can trust to use in everyday life for cheap and fast peer-to-peer transactions, while less transactions per day indicates the opposite.

 

 

The number of Dash transactions are increasing

A few days ago, the number of Dash transactions per day had increased to over 35,000 transactions, which had exceeded the transactions count per day of both Litecoin and Monero, combined. This occurrence makes sense, intuitively, since Dash has been focusing on everyday adoption around the world. Dash has been so appealing to so many people because it has been able to consistently maintain low transaction fees, fast confirmation times, and security. This makes Dash appealing to both consumers and merchants relative to traditional currencies and payment methods that are unstable due to monetary and fiscal policy or charge exorbitant fees. Dash also sets itself apart from other cryptocurrencies that have seen spikes in their transaction fees and confirmation times, which has made those cryptocurrencies less reliable than Dash.

Dash is experiencing rapid adoption around the world due to its treasury system that has allowed for professional and experienced development and outreach around the world. Dash is now seeing the rewards of that incentivized structure and hard work through an increasing number of transactions. This brings Dash one step closer to accomplishing the goal of cryptocurrency to be a decentralized peer-to-peer currency and payment network.


Here at Dollar Destruction, we endeavor to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!
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Author: Justin Szilard
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