Like an enormous deck of cards being dealt neatly and uniformly into many small hands, well over $1.6 billion worth of bitcoin have been shuffled around in the past couple of days from eleven into hundreds of neat little piles of bitcoin, in eleven transactions of between mostly 66,000 and 32,000 bitcoin each. Considering that the final transactions came during the writing of this article, it would be unsurprising if more followed in the coming days.
Bitcoin’s pseudo-anonymity, while in the eyes of some a glaring defect of the pre-eminent crypto, has certainly been useful in this regard. We can publically see that eleven transactions (#1, #2, #3, #4, #5, #6, #7, #8, #9, #10, #11), totaling 424,754 bitcoin, were each moved around into new wallets and subsequently into 100 perfectly divided wallets (excepting in every tranche one oddball 200 bitcoin wallet). In every case, the original wallet was moved to an intermediary wallet before continuing into the final, smaller ones.
The three largest originating wallets were all very old, one of them of 2013 vintage, with the following ones being from 2017 or 2018. In the bigger (first) wallets there had been little, but not nil, activity during 2018, with almost all 2018 transactions being extremely tiny - typically less than a dollar’s worth in today’s terms; whereas the newer wallets had plenty of large transfer traffic.
Most notably, in all eleven cases the massive external transfers had been the first-ever outgoing transfers for each of those wallets - all previous activity had been incoming. Also noteworthy is the transition from non-Segwit to 1,100 Segwit-enabled wallets, indicated by the “bc1” (bech32 format) prefix on each of the tiny wallet addresses.
Who Made the Transfer?
Since all of the eleven transactions have behaved in the exact same manner, it is reasonable (although of course, not ironclad) to presume a single entity is conducting all of this activity.
The oldest and largest of the wallets have been watched on bitcoin’s rich list for years. The identically repeated activity would, anecdotally at least, associate the November 2013-aged wallet with the newer 2017/2018 ones.
The Whale Alert Twitter account reported the most recent of these transfers to have originated from a Coinbase wallet. Coinbase as a company dates back all the way to 2012, so this would not be impossible.
Coinbase did issue a public notice on 29 November, that it would be for one week “running scheduled maintenance across our platform that may cause movements on all Coinbase-supported blockchains.” So this explanation would at least be consistent.
If indeed all of the transactions were issued from the same entity, as seems to be the case, it would be a single entity controlling a considerable 2.5% of all bitcoin currently in circulation - and that is without considering the millions of bitcoin potentially lost forever.
Whoever it was moving around so much bitcoin, the real star of the show may be the transaction costs of moving such quantities wealth.
The initial movements from the older addresses to the intermediary ones ranged from $40 to near $10, with the subsequent Segwit movements costing about $3.00 to divide an entire stack en masse. One of the benefits of Segwit are the far lower transaction costs versus legacy addresses.
All told, the fee for moving $1.6 billion in this extremely complex opeartion has so far totalled a few hundreds dollars - and only that much because the original addresses were in some cases extremely old. Had they all been using segwit, the cost would probably have been less than $50. One can imagine the legal hoops, red tape, and fees that would come with such a transfer using the legacy financial system - even at 1%, into the hundreds of thousands.