A recent Ethereum transaction highlights the potential that blockchain technology has to lower financial barriers. The transaction, which is linked to cryptocurrency exchange Coinbase, saw appr. 150,000 ETH (over $245 million) moved for just $1 in-network fees.
(Source: Etherscan)
The fee paid for this transaction is remarkable, especially given Ethereum’s record of high fees during peak transaction times. It also underlines the low demand for blockspace on the network as the cryptocurrency bear market wears on and user activity declines.
Meanwhile, the transfer to a Coinbase-owned address and the incredibly low fee suggest it is simply the exchange swapping funds between addresses. Further speculation could be that a large ETH holder is moving assets into Coinbase for trading or staking on the platform.
Is Blockchain the Answer to Low-Cost Transactions?
The low fee paid on the $245 million transfer is significantly cheaper when compared to the average cost of sending the same transaction across borders using a bank or another remittance service. Additionally, the blockchain-based transaction settled almost instantly (confirmed within 8 seconds), compared to payment networks where such transactions may take several days to arrive.
Despite its unique benefits, however, blockchain technology has come under heavy criticism for its immutability, which means users cannot recover funds lost as a result of mistakes. Coinfomania once reported a case where a user spent $350,000 in Ethereum fees, only for the transaction to fail.
Blockchain undoubtedly holds promise for global payments, given its censorship-resistant and low-fee nature. Yet, the technology is still less ideal for mainstream payment use cases when compared to their traditional counterparts.
