On September 5, an unknown party transferred more than $1.01 billion in Bitcoin in a single transaction. With a fee of just 0.000069%, the transaction illustrates once again how Bitcoin may be a better option for remittances than more traditional means.
Bitcoin Whale Moves 94,504 BTC
Whale Alert, a service that provides live tracking of large cryptocurrency transactions, posted the transaction on Twitter late Thursday evening.
🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 94,504 #BTC (1,018,147,922 USD) transferred from unknown wallet to unknown wallet
— Whale Alert (@whale_alert) September 6, 2019
This particular transaction has garnered a great deal of attention from the crypto community for two reasons.
First, the 94,504 BTC transaction represents 0.52% of Bitcoin’s total circulating supply and second, it incurred a fee of just 0.06534852 BTC, equal to $700.24 at the time of the transaction.
That amount might seem large to anyone used to sending small amounts of money, until you consider that the value of the transferred bitcoins was more than US$1.01 billion [AU$1.48 billion].
The fee ended up representing just 0.000069% of the total amount of BTC moved.
Speculation ran rampant as to who the sender could be, with some CryptoTwitter denizens suggesting that the funds were linked in some manner to Bakkt, the crypto asset platform created by NYSE parent company Intercontinental Exchange (ICE).
Bakkt is expected to offer physically-backed Bitcoin futures contract to investors when it launches later this month.
Is Bitcoin really cheaper for sending remittances?
There are several different ways to transfer money around the world. What this transaction shows is that despite claims to the contrary, Bitcoin remains one of the cheapest – and fastest – ways to send funds compared to other solutions.
When you transfer funds using traditional means – e.g. bank wire or other fiat-based remittance service – it isn’t just the transfer fee you have to look at. There are also exchange rates, margins, and other hidden fees and costs to consider.
International remittance service TransferWise, for example, charges 0.36% in total fees on a $1 million transfer, which comes out to $3,628.73. Of that total, just $5.34 is the actual wire transfer fee – the rest is nebulously labeled as “Our fee”.
Presumably, the percentage charged would be less on a $1.01 billion transfer, but even if it was half that – 0.18% – the total fees charged would be more than $1.8 million.
And don’t expect to get that money right away. According to its online calculator, funds sent today “should arrive” by September 10.
By contrast, not only was the Bitcoin transaction fee more than 260,000% LESS than TransferWise, but the transfer was completed in just 17 minutes.
Try finding a bank that can beat that.