A Bitcoin transaction made by cryptocurrency exchange Bitstamp involved 112,026.29 BTC, worth around $1 billion, and cost only $4 in transaction fees. The transaction was confirmed on a blockchain network explorer platform BitInfoCharts on the 14th of October.
In a previous transaction made by the exchange, Bitstamp moved 107,800 BTC to the wallet provider and paid a 0.0234 BTC fee, which amounts to 0.0000217% of the entire transaction.
In the billion-dollar worth transaction carried out by a wallet service provider, the fee carried out to Bitcoin miners was even smaller. Worth exactly $3.89 in fees, the rate paid to miners is not even high enough to be written out using standard decimals, as it amounts to 4.1724762780401154e-7%.
Commenting on the transaction, the CEO of Bitstamp Nejc Kodrics stated in a recent tweet that the assets were ‘transferred in a single transaction for the price of a cup of coffee.’
Seeing that the gigantic transaction took place with ease and no supervision from a 3rd-party entity, we have an example of how huge transfers of wealth can be carried out by adopting cryptocurrencies. Astonished at the low fees, the crypto community took note of the event.
However, the event caught the attention of a certain Crypto Twitter user who noticed that the transaction resulted in 73 million Bitcoin days destroyed (BDD). The BDD is a concept that can be applied to measure the metrics of Bitcoin. In essence, BDD is calculated by multiplying the number of Bitcoins with the number of days since the Bitcoins were last spent or transferred from its address. Applying the concept to the $1 billion transfer, we see that the assets did not exit Bitstamp’s wallet for a significant amount of time.
Furthermore, enthusiasts can apply the concept to measure market activity. Trading volume cannot be seen as the true amount of assets transferred between traders as it can also account for assets that changed addresses held by one user. In that regard, the cryptocurrency market cannot really express its economic activity.
Will the sector continue to enjoy low fees?
According to data from BitInfoCharts, the average transaction fee in dollars costs less than $1. In June this year, the average price of transaction fees was $5. However, the story is entirely different when compared to a bull market environment. Based on data from December 2017, during the high of Bitcoin’s price, the average transaction fee amounted to up to $50.
As mining and trading activity has a considerable effect on transaction fees, users can transfer their assets at almost no cost during a bear market. However, crypto enthusiasts who wish to cash out during a bull run will have to keep their number of transactions limited, as they can potentially waste hundreds of dollars on fees.