The invention of Bitcoin is arguably the biggest threat to the banking system already revolutionising the way money is being exchanged and transacted. There’s no doubt that in the past few years the cryptocurrency gained popularity and much respect from all fin-tech sectors for its ability to offer a faster and much cheaper alternative to cross-border money transfers, along with some other use cases that made it a factor in finance that can no longer be ignored or ridiculed (that was a popular practise in the early years of its lifespan).
Besides being censorship-resistant, Bitcoin offers the ability of true ownership and self-management of your own capital, without the need of a third party involvement. For the first time since the modern monetary system was invented, people are able to have unlimited and permisionless access to their own capital.
There are millions of transactions happening on a daily basis and while this is not news, I want to draw your attention to the fact that people are now transacting millions of dollars’ worth in bitcoin in a single transaction, for fees below one dollar. Remarkable, right?
The twitter account @BtcBlockBot reports about such large transactions and this month alone, it reported about more than 20 of them. Out of these, only one incurred a larger fee (80 usd for a billion dollars’ worth of bitcoin) possibly transacted by Bitfinex as reported by the bot on January 14. In contrast, the rest of the whale transactions are all at the cost of just a few cents each. On January 20 for instance, a transaction of 51511 bitcoins estimated at around $450 million were moved from one wallet to another for a fee of just $0.25 (USD) – yes, a single quarter, which really can’t get you anything in the western world these days. This equates to a fee of effectively 0%, with 0.25/450,000,000 on the calculator outputting an odd number in scientific number format and this could have even been an overpaid fee, with the transactor likely having the option of paying an even lower fee, under the $0.1 range, if they didn’t mind waiting a bit longer and could have saved 30% in fees by upgrading to SegWit and 16% more than that if there was a full upgrade to a native SegWit-Bech32 address.
A few more examples:
- January 3 – $468 million USD was transacted for a fee of just 0.0000268btc which comes to $0.23;
- January 9 – $466 million USD transfer incurred a fee of $0.71
- January 15 – $465 million USD (53,911 BTC) was transferred for a fee of $0.29 (3360 sats)
- January 16 – a whopping 124946 btc (that’s over 1 billion USD) was moved at a fee of just $0.48 USD.
- January 17 – a transfer of 52,511btc (half a billion USD) was costing just $0.35
All of this just goes to show that while still struggling to be accepted as a currency, bitcoin is really doing a good job as a means of exchange – one of the qualities of money.
The volatile nature of the cryptocurrency is still an issue for the end-user, especially in the retail sector where price stability is essential, but even if bitcoin fails to deliver the “digital cash” promise for the smaller, day-to-day use cases, that doesn’t stop it from achieving its more ambitious goal – disrupting the banking industry and giving the power to us – regular folks who want to have a greater control over our own capital by avoiding the third party intermediaries and their ever-so-high fees and restrictions of transacting.
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