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Anonymous user sends 0.0002 BTC and pays 1.99 BTC in Fees!

Some days ago, Ethereum World News reported that an anonymous user made several transactions from their personal wallet, with enormous fees. What at one point seemed to be a mistake soon gave rise to a strong debate after this practice was repeated several times throughout the day. On March 11, this unusual incident happened again, but this time with a Bitcoin (BTC) wallet, which sent less than a dollar in BTC, paying fees of near $7769.

BTC Block explorer showing the inusual fee of 7.7k USD for a 0.6 USD transaction

The information, available for verification in the block explorer of the Bitcoin (BTC) blockchain shows that the transaction comes from a wallet address with two movements: A deposit for that amount of money and a spend 10 minutes later with the extraordinary fee.

Considering that there have been no further operations from this address, it is difficult to determine whether it was a mistake or if there is any motive behind these types of transactions. Precisely what raised suspicions in the series of identical activities carried out on the Ethereum network is that they came from the same wallet address.


Doing a little more detailed monitoring, it is possible to detect that the address received the funds from the wallet 1G47mSr3oANXMafVr8UC4pzV7FEAzo3r9. This wallet is quite active (more than 367,000 transactions) with a current balance of 2.7 million dollars and near 400 million dollars of total funds moved, so it could be concluded that it was either funds withdrawn from some Exchange, or it was an error done by the staff of an Exchange in an internal movement.

Fat-Fingers? Money Laundering?

The community has, of course, discussed the causes of this “disaster“ however, apart from the possibility of an error, the two strongest explanations seem to be

  1. The improper coding of a trading bot
  2. Some complex scheme of “money laundering” through the secret mining of a block containing the transaction with the exorbitant fees (not uploading it to the blockchain until it’s mined).

In the case of the present transaction, and until there is evidence of more similar situations, it is very possible that it is a “human error” trying to pump up the fees without verifying the amounts. Please, if you are a user of cryptocurrencies, it is always worth the effort to spend a few seconds to check all the data of a transaction. Remember that in the world of cryptocurrencies, you are your own bank.

The post Anonymous user sends 0.0002 BTC and pays 1.99 BTC in Fees! appeared first on Ethereum World News.

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Someone Sent 300 Million USD in Bitcoin (BTC) Paying a Fee of 0.004 USD

Reddit forums got heated a few hours ago when a multimillion-dollar transaction was reported on Bitcoin’s Blockchain at almost minimal cost. A wallet of unknown origin mobilized 48,500.08799325 BTC and only paid a fee of 675 Satoshis (0.004 USD).

At the current exchange rate, this would represent a total of almost $300 million sent in minutes:

Several posts documented this transaction not only because of the multi-million dollar amount but also because it is a sign of the practical advantage of using cryptocurrencies in the financial market.

Usually, this type of transactions through traditional systems, can exceed several days of procedures, especially if the parties are located in distant countries.

The debate on the convenience of crypto transactions generated interesting answers, despite agreeing on their practicality: One side considers that the ease of delivery is a definite advantage of cryptos over banking:

However, other users, with the same sarcasm, highlight the convenience of the centralization characteristic of the traditional banking system:

Another critical aspect to note, in addition to the time, is the minimal costs of sending funds through Bitcoin’s blockchain. Paying a fee of $0.004 for a multi-million dollar shipment is virtually free when compared to traditional bank rates.

Thanks to the implementation of second layer solutions, bitcoin transactions have been able to decrease their cost while increasing adoption. Such technological advances have proved successful despite criticism from other altcoins such as Bitcoin Cash.

The Scalability Debate: Why is a Fee So Important?

One of the main reasons Bitcoin Cash users consider BCH a better option over BTC is precisely the high price of fees.

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And while this was true last year, it is provable that today it has no livelihoods whatsoever. Only by way of comparison, tracing the origin of the funds, it seems that the original wallet received this significant amount in late 2017. That transaction of almost 1Bn USD in BTC charged a fee of $15 by then (0.00080908 BTC)

Roger Ver assures that Bitcoin Cash’s solution makes it a highly recommended altcoin for the public. He affirms that instead of implementing solutions such as Lightning Network or Segwit, an increase in block size is better. Bitcoin Cash currently supports up to 32 MB per block.

The Bitcoin community criticizes this solution for undermining the decentralization that Satoshi Nakamoto spoke of in Bitcoin’s white paper. By increasing the block size, individual miners would be unable to mine a block given the lack of hashing power.

Although most of BCH’s major proponents are precisely miners, the community keeps united despite BTC’s minimal fees and confirmation times.

Currently, BTC is valued at 6.137 USD and BCH at 698 USD.


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Lightning Network Shows 99 Percent Failure Rate on Large Bitcoin Transactions

There is hardly any denying the immense possibilities attached to the Lightning Network (LN). However, despite its growth and increasing popularity, it still performs poorly as a Bitcoin payment processing protocol.

Lightning Network Can’t Handle Large Transactions Yet

Lightning Network is a second layer payment protocol on the Bitcoin blockchain. Together with Segregated Witness (SegWit), it is one of the essential upgrades to the Bitcoin architecture. Both have even been identified as primary reasons for the drop in BTC transaction fees.

LN uses smart contracts deployed on top of the Bitcoin blockchain network to facilitate instantaneous low-cost transactions. The protocol also provides a measure of scalability with some experts identifying it as the possible panacea to Bitcoin’s scalability conundrum. Since its introduction, LN has grown to over 2,500 nodes with a network capacity of $150,000.

Despite its growth, LN appears to be less than ideal for sending large BTC payments. According to a recent report by Diar, LN has a success rate of only one percent for transactions above $200. Even for transactions that are less than $100, the success rate is somewhere in the 70 percent region. For a protocol that is supposed to improve the payment efficiency and scalability of Bitcoin vastly, these figures are not up to standard.

Major Bugs in the LN Protocol

LN is still in its Beta testing phase, and as such, there are critical bugs in the system. One of these flaws is the fact that all three participants in a transaction – sender, intermediary, and receiver – have to be online for the transaction to occur. Presently, it is impossible to transfer BTC via LN to someone who is offline.

This particular bug has led to another less than ideal situation in the LN protocol – the emergence of large hubs on the network. These large hubs have enough liquidity to route large BTC transfers. Thus, network capacity has become concentrated in a handful of these large hub nodes. In fact, ten of the largest LN nodes control 53 percent of its capacity despite being only a meager 0.4 percent of the network.

Bitcoin Exchanges Implementing LN Hubs

It is important to note that these large hubs don’t control the network. However, they can be considered as money transmitters. For this reason, regulated exchange platforms are reticent about implementing LN hubs. Commenting on this issue, Bitcoin advocate, Andreas Antonopoulos said:

I don’t think Coinbase will run Lightning, and I think there are many reasons why we’re not going to see regulated exchanges run Lightning Hubs. They have a fully KYC/AML-ed customer on one end of their connection, but if they receive a payment that’s going to that customer over the Lightning Network, they have no idea whether that customer’s the final destination. If they receive one coming in from that customer, they have no idea if that customer’s the origin, which means their KYC just fell apart – completely fell apart.

Do you think Lightning Network will be able to facilitate larger transactions in the future? When do you expect Bitcoin exchanges will begin to run Lightning Hubs? Keep the conversation going in the comment section below.

Images courtesy of and


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Bitcoin Transaction Fees Spike as Bithumb Hurriedly Tries to Clear its Hot Wallet in the Wake of the Recent Hack

Bitcoin transaction fees are currently triple their value less than 24 hours ago. Also, there are reports of transaction backlogs as the network appears congested.

Bitcoin Transaction Fees Triple in Less than 24 Hours

At the time of writing this article, the average BTC transaction fee is $2.75. This figure is more than triple the cost per transaction yesterday. In fact, BTC fees haven’t crossed the $1 mark for most of 2018.

According to Sergej Kotliar, the CEO of Bitrefill, the reason for the spike in BTC transaction is because Bithumb is hurriedly trying to clear out its hot wallet. Bithumb, a South Korean cryptocurrency exchange platform recently suffered a cyber-attack. The hackers stole more than $30 million in cryptos.

Explaining the situation, Kotliar said:

Possibly related to their [Bithumb] hack would explain them overpaying 100x on fees for consolidation. This does put [a] strain on the whole network, and everybody’s fee estimators.

Miners usually prefer to mine the blocks with the highest fees first. With Bithumb seemingly desperate to move funds quickly, it appears their transactions are being given priority attention. This situation leaves other “normal” transactions in temporary limbo.

Kotliar, however, does not think the situation will last for too long, saying:

This is a temporary thing. Will likely have blown over tomorrow, two days at most. This is not a repeat of December/January.

Another Twitter account, “WhalePanda” had this to say about the situation:

Bithumb is paying crazy fees to consolidate everything now (assuming it’s not the hacker), driving up the overall fees for everyone on the network. Is this a problem? No, not really. It’s definitely annoying, but not really a problem, it’s temporary.

In December 2017 all the way to the beginning of February 2018, Bitcoin transaction fees reached record levels. Also, the network was bogged down by slow confirmation times which regularly reached more than 20 hours per transaction. However, the introduction of protocol upgrades like SegWit and Lightning Network significantly reduced fees on the network.

The Curious Case of the Bithumb $28 Million Tax Fine

Less than a fortnight ago, Bithumb was cleared of tax evasion charges in South Korea. However, the platform still incurred a $28 million tax bill for unpaid taxes. In the early hours of Wednesday, 20 June 2018, reports emerged that the platform had been hacked to the tune of $30 million. The proximity between the two events has caused some in the crypto community to suspect some foul play.

The platform hasn’t revealed which of the coins in its holdings were affected by the hack. Bithumb has even deleted a few tweets about the hack leading to a few raised eyebrows of people monitoring the situation

Do you think the current spike in BTC transaction fees is a temporary anomaly? What are your views on the Bithumb hack happening so close to its $28 million tax fine? Keep the conversation going in the comment section below.

Images courtesy of Twitter (@ziggamon and @WhalePanda).