The batched transaction — which saw 94,504 bitcoin move from a series of unknown addresses into another unknown wallet — was sent in the early morning hours of September 6th, after which attention quickly spread due to the sheer size of the send.
Of course, it’s hardly the first time buzz has been generated over a huge movement of BTC. But more often than not these movements are known to be from popular cryptocurrency exchanges moving around their own understandably large funds as block explorers websites identify and track many of the largest exchange addresses.
???? ???? ???? ???? ???? ???? ???? ???? ???? ???? 94,504 #BTC (1,018,147,922 USD) transferred from unknown wallet to unknown wallet
— Whale Alert (@whale_alert) September 6, 2019
With that said, the September 6th transaction is notable because it bucks that trend: it came from a series of unknown addresses and ended up in another unknown address (37XuVSEpWW4trkfmvWzegTHQt7BdktSKUs).
The Known Unkown: Bakkt, Is That You?
The purpose of the transaction is unclear at present courtesy of the pseudo-anonymity of the Bitcoin blockchain.
However, some have speculated that the large BTC sum might be connected to the rise of the Bakkt cryptocurrency exchange, which is backed New York Stock Exchange owner-operators Intercontinental Exchange (ICE). Notably, Bakkt opened BTC deposits and withdrawals to its custodial Bakkt Warehouse on September 6th.
Today our Warehouse opens for customer bitcoin deposits and withdrawals as we prepare for the Bakkt Bitcoin Daily & Monthly Futures, launching September 23
The availability of physical delivery brings more flexibility in managing bitcoin exposure
— Bakkt (@Bakkt) September 6, 2019
Accordingly, Bakkt would have the resources and the rationale to be connected to such a large amount of bitcoin. Short of a public disclosure from the company or more definitive crowd-sourced findings, Bakkt’s involvement seems a strong speculative guess for now.
Still, it remains to be seen whether the party or parties responsible will make any kind of direct public disclosure, presuming the entity is an exchange after all. For example, Malta-based cryptocurrency exchange giant Binance has announced large bitcoin transactions in the past, but it’s not a conventional practice.
— Binance (@binance) June 17, 2019
Zooming in, the 94,504 BTC transaction is also notable in a much more basic sense, Bakkt or not: the associated sum accounts for 0.45 percent of the 21 million bitcoin that will ever be created. How’s that for stacking sats?
Moreover, in the wake of the transaction observers noted the sender paid only $700 worth of bitcoin to move such a large amount of money. Others pointed out yet that the “whale” could have moved the same sum while paying considerably less than $700 in fees.
Nick Szabo Says The Tx Tempted Fate
Cryptocurrency and smart contracts pioneer Nick Szabo later highlighted on Twitter that moving such a large amount of coins at once showed that the sender likely had enough resources to launch a long 51 percent attack campaign against the Bitcoin blockchain.
In other words, the sender could fight to reverse the 94,504 bitcoin back to their control, at least theoretically speaking.
Such confidence in Bitcoin is splendid, but a 94,500 BTC tx tempts fate. If recipient can make that much from reversing the tx, they can afford to run a 51% attack for more than 40 days. Big if & very visible, but security here depends more on trust & less on the protocol itself. https://t.co/KQjH8RiAck
— Nick Szabo (@NickSzabo4) September 6, 2019
In a follow-up post, Szabo argued the transaction was likely being done within a single organization and that the sender’s internal key management system was more of a direct guarantee for the protection of the involved funds:
“If this is a tx internal to an organization, while that doesn’t make it risk free (indeed just trusting employees with custody can be risky), their key management & other internal controls, not raw difficulty of reversing BTC tx, is their main protection for such a large amount.”
Others in the space saw Szabo’s remarks as indicating why proof-of-work blockchains like Bitcoin may be practical but ultimately insecure. For example, Gnosis founder Martin Köppelmann took the comments as an opportunity to publicly predict that significant block reorganizations of Bitcoin are not far off on the horizon.
“The global settlement layer will not use insecure POW,” Köppelmann said.
My prediction is that we will see >6 block reorgs in the next 3 years.
The global settlement layer will not use insecure POW. https://t.co/FxMM9v2aN2
— Martin Köppelmann ???????? (@koeppelmann) September 6, 2019
Thus intrigue, uncertainty, and debate abounds. Just another typical day in the cryptocurrency ecosystem, right?