How To Transfer $1 Billion Free: Bitcoin Whale Watching

by · November 4, 2022

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

One 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 value of a Bitcoin), equivalent to half a dollar, for the pleasure.

Transaction sankey diagram showing fees, value and time. Source: mempool

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

Cointelegraph experimented with various online banking services to calculate the cost of sending huge sums of money through legacy financial tools. For the $10 million transfer, a well-known money transfer provider charges a small fraction, 0.3%, which equates to $30,000. It is one million times more expensive than using the Bitcoin blockchain to send money.

Experimenting with sending huge sums using legacy financial tools. Source: Wise

Before a new Bitcoin block is mined, each Bitcoin transaction request resides in the memory pool, or “mem pool”, which is a bit like a Bitcoin bus stop. On average, miners take 10 minutes to mine a new block.

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

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

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

Related: BTC Miner CleanSpark Picks Up Thousands of Miners Amid ‘Distressed Markets’

The Bitcoin whale address continued to send over 50,000 Bitcoins to various other addresses on the blockchain. 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.