Binance Pays 6 Cent Fee For Moving $204 Million Worth Of Ethereum (ETH)
Binance Moved $ 204 million Worth Of ETH For A Fee Of 6 Cents
Binance, the biggest crypto trading exchange, has successfully transferred 988,888 ethereum worth about $ 204 million to a new address for a fee of 6 cents.
We will be moving some funds between our cold wallets. A tell tale sign of a new cold wallet on Binance is two small transfers from and BACK TO an existing wallet, then a large transaction. No need to be alarmed. Funds are #SAFU.
— CZ Binance (@cz_binance) October 20, 2018
Notably, this is the biggest transfer since February of this year when Poloniex moved about two million Ether after it was acquired by Circle. With days destroyed the more funds remained at the previous address for approximately one year.
There is no clarity on the reason for moving the funds, but 100,000 eth were sent to the new address and 888,888 after an in-and-out test transaction. 8 is an auspicious figure in China, signifying Zhao might have been slightly anxious when all this eth was sent to the blockchain ether.
The transfer operation of these funds must have been huge and intense. One simple mistake and everything might be gone. Usually, therefore, important precautions are taken, with the easiest one being the breaking up of the private key through Shamir’s Secret Sharing, inserting a key say at the backside of the shoe, one at the selected vault in Switzerland, one with the grandma wherever.
Once the assets are transferred, then a new system might need to be set up because there will probably be leakage somewhere. The two biggest known cold wallet movements until recently were MT Gox in 2011 and Bitfinex sometime in perhaps 2014-15. Both were hacked eventually.
In other words, such a movement is only taken if there is some necessity. Whether there was in Binance’s case, we do not know. They recently said there was some database problem, so they had to re-synchronize, but if there is anything more under the surface is anyone’s speculation.
Disclosure to the public would only reduce trust, with the question of hot wallets not being hacked, but when. As such, a practical businessman would firstly control the amount necessary in the hot wallet to perhaps 5% and set aside enough profits to cover that so that when the unexpected takes place, the users will not be affected in any manner.
Perhaps a smart approach is showcased by Coinbase. We can’t find their cold wallet. That’s because they don’t have one cold wallet sitting with a million eth. Alternatively, they seem to have many cold wallets sitting with perhaps 5,000 to 10,000 eth. Now you chop the keys of each of these addresses, add the risk of being caught, add the difficulties of cashing out, add the many easier things your “talents” can gain you, and basically, the design is fairly impossible to hack, with the only drawback here is managing it all. Coinbase is able to claim the title as the only leading crypto exchange/broker that has been around for so long and has experienced no hack.