How to Transfer $1 Billion for Free: Bitcoin Whale Watching

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Billionaires, take note. It’s a million times cheaper to send huge sums of money on the Bitcoin (BTC) blockchain.

A Bitcoin user sent over 50,562 BTC ($1 billion) to an address on the blockchain, paying a fee of just 2,513 Satoshis (the smallest denomination of a Bitcoin), equivalent to one half dollar for fun.

Sankey transaction diagram showing fees, value and time. Source: mempool

The unknown wallet address paid out a tiny fraction (less than 0.0001%) of the total transaction value. Simply put, the user paid 50 cents to move double the GDP of the Bitcoin-friendly islands of Tonga. The billion-dollar transaction was processed in block 761374, with a transaction fee of just 15 satoshis (sats) per unit of data or sats/vByte.

Cointelegraph has experimented with various online banking services to estimate the cost of sending large sums of money through legacy funding tools. For the transfer of $10 million, a well-known fund provider charges a tiny fraction, 0.3%, which equals $30,000. It’s a million times more expensive than using the Bitcoin blockchain to send money.

Experiment with sending large sums of money with legacy financial tools. Source: Wise

Before a new bitcoin block is mined, every bitcoin transaction request sits in the memory pool, or “memory pool”, which is kind of like a bitcoin bus stop. On average, miners take 10 minutes to mine a new block.

Bitcoin miners sort transactions, processing passengers who have the most expensive bus tickets (transaction fees) first. Generally, the higher the transaction fee, the faster the transaction is confirmed. At 15 sats/vByte, the cost of sending over 50,000 Bitcoins is very low, indicating that this Bitcoin whale was in no rush.

For comparison, in late October, a fat-fingered Bitcoin user paid 8,042 sats/Byte, or 1,136,000 sats to move 3.8 Bitcoin ($65,000).

The process of sorting transactions into the mempool is relatively straightforward for miners. Contrary to the beliefs of many Bitcoin critics, it is not an energy-intensive process. Ultimately, Bitcoin’s energy consumption comes from issuing block rewards, not from transactions.

Related: BTC Miner CleanSpark Recovers Thousands of Miners Amid “Struggling Markets”

The Bitcoin Whale address continued to send over 50,000 Bitcoins to various other blockchain addresses. The addresses are not publicly known addresses, such as Binance’s cold storage wallet or Bitcoin mined in 2009, which was later lost in a landfill in Wales.

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