Cryptos Too Expensive? Binance Sent $600 Million in Bitcoin for Just $7

Cryptos Too Expensive? Binance Sent $600 Million in Bitcoin for Just $7

Crypto exchange Binance has been moving bitcoin funds to cold storage the past couple of days, and, of course, such large transfers dont go unnoticed.

Two transactions destined for Binances cold wallet come to the fore and demonstrate both the power and irony of the blockchain.A transaction in block 550211 was a transfer of just over $1 million. For this transaction, Binance paid just over $8 in fees. The high amount of the fee is probably a matter of convenience, as the transaction was not particularly large at just 1550 bytes.

The other transaction, first flagged by Antoine Le Calvez of, is more notable for its size $600 million at the time it was sent, making it the largest unspent transaction output existing today but also illustrates the irony of Bitcoin transactions, whose fees are not based on the amount transacted but instead the amount of computer resources required to store the information. This second transaction, madein block 550155 several hours earlier, comprised 5981 bytes yet cost the giant exchange just over $7.


Other factors, such as network activity, apply to transaction fee calculations.

Contrast With Traditional Transaction Movement

It should first be noted that there is no banking product with the same security as a cold storage wallet. A cold storage wallet is one that is not connected to the blockchainvia the internet. With appropriate security hygiene, it can amount to having direct access to your personal fortune with no middlemen.

It would take days or weeks to find out the cost of moving funds between bank accounts from various banks, and banks are in particular not the best thing to compare Bitcoin with, it being primarily a remittance tool. Nonetheless, it is known that interbank fees generally run in the neighborhood of 4 percent or more, supposing the funds were being moved internationally. Domestically there would still be fees, which would depend very much on the bank being used.

Banks using Ripples enterprise DLT products and other blockchain technologies might be able to reduce the cost significantly. Likewise, one-time deposits and other deals can be made with banks when moving this amount of funds. But this is cold storage, after all funds that Binance will later probably need access to. The notion of paying any more than necessary fees for access or movement, and being reliant on external forces, is antithetical to the business of being a cryptocurrency exchange.

Which is to say, Binance is engaging in money transfers that wouldnt have been possible in a previous era in order to facilitate a business model that wouldnt have been possible in a previous era, all at a cost that would have been unimaginably low in a previous era.

We find it helpful to compare the cost of these transactions with a service like PayPal instead. While its unlikely that Binance would work with PayPal or that PayPal would work with transactions of this size, its useful to compare the value of Bitcoin to other remittance models. According to, which specializes in such data, a fee of $17,400,000.30 would be incurred moving $600M to the PayPal account of the cold storage steward in the theoretical case of a PayPal model. PayPal does not charge fees for moving funds to bank accounts, but there is an associated delay when using traditional banking models.

Featured Image from Shutterstock

17.11.2018 / 15:30 23
CoinPayments Integrates Binance Coin, BNB Now Accepted by 2.3 Million Merchants CoinPayments Integrates Binance Coin,
The team at CoinPayments recently announced via twitter, that they had integrated Binance Coin (BNB) onto their platform. The announcement went on to
Binance Completes its 5th BNB Coinburn, Reducing Total Supply by 1.64 Million Binance Completes its 5th BNB Coinburn,
In a transaction traceable on Etherscan, the team at Binance has carried out its fifth coinburn of the Binance Coin (BNB). The total supply according
One of the First Bitcoin Miners is Quietly Cashing Out: Blockchain Researcher One of the First Bitcoin Miners is
As of Thursday, Sept. 25, the bitcoin price has climbed about 3 percent, briefly crossing the $6,700 level and extending toward $6,750 at one point
Binance Now Lets Users Convert Crypto Dust to BNB Binance Now Lets Users Convert Crypto
Binance has launched a new feature that allows users to convert crypto dust into BNB tokens. Changpeng Zhao (CZ), the Binance CEO made this known via
Huge Litecoin Transfer Shows How Absurdly Expensive Regular Remittances Are Huge Litecoin Transfer Shows How
In the world of finance, transferring money around the world can be expensive. This is especially true where banks and other service providers are
Bitcoin Dust: How to Tell If You Have It And Why You Should Get Rid of It Bitcoin Dust: How to Tell If You Have
Imagine having a $100 bill in your pocket. Now, imagine $100 worth of pennies. Notice the difference? Bitcoin isn't without its irritating kinks, and
Comments (0)
Add a comment
Comment on