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Whenever huge funds are transferred, everyone pays attention. The exchange of cryptocurrency, Binance was spotted moving large quantities in a cold store. Thanks to the transparency of blockchain technology, these transactions can not be hidden. First, Binance transferred more than $ 1 million of BTC into block 550211 by paying approximately $ 8 in fees. Transaction fees were considered high. This is probably due to the fact that it was a small transaction taking only 1550 bytes.
Yesterday, Binance created the largest unspent transaction output over a 24-hour period at 109,000 BTC. That's about $ 600 million. The transaction was reported by CoinMetric's Antonie Le Calvez. The cost of running this transaction shows that the Bitcoin Blockchain does not base fees on the transaction amount, but on the computing resources required to store the information per transaction. This transaction was done in block 550155. It consisted of approximately 5981 bytes but was only $ 7.
Movement of funds on Blockchain Vs traditionally
Do not forget that you can not compare any of the existing banking products to a cold storage portfolio offering 100% security. A cold store for encrypted currency is only accessible if it is connected to the blockchain via the Internet. It offers maximum security and does not require intermediary services.
If large funds are to be transferred from one traditional financial institution to another, it will take some time to determine the cost. In addition, you can not compare banking services to the type of services you enjoy with the blockchain. Nevertheless, interbank fees usually cost about 4% of the amount sent. Whether the funds are transferred domestically or abroad, these fees are still applicable. They usually vary from one bank to another.
Thanks to Ripple's enterprise technology and other blockchain solutions, some banks have been able to reduce fund transfer costs. In addition, point deposits can be made when large quantities are moved. With a cold storage, Binance may have to pay to access the funds when they are ready. However, the cost will depend on several generally external factors. In simple terms, this kind of big transfers would have been impossible or difficult for a company like Binance, without blockchain technology.
Bitcoin (BTC) Price Today – BTC / USD
To bring the point home, compare the cost of using the blockchain to the costs of payment service providers such as PayPal. Even if a collaboration between Binance and PayPal seems unlikely with such a large transaction, in a hypothetical situation, it would cost Binance about $ 17,400,000.30 to transfer the $ 600 million through PayPal. Note the difference between a blockchain transfer ($ 7) and a traditional payment service provider ($ 17,400,000.30). Do not forget the delays that may occur when you try to transfer such funds from PayPal to your bank account.
Bottom line
Blockchain technology has the potential to reshape the entire financial sector for the better. The cost of transfers will decrease considerably, while the fees charged by intermediaries will be reduced. While many of these third-party service providers will need to evolve or change their business, the benefits will benefit end-users and blockchain-based businesses. The important thing right now is an increase in the number of adoptions.
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