An anonymous user paid approximately $2.6 million in transaction fee to transact small amounts of money in the Ethereum (ETH) cryptocurrency two times over the last 24 hours at press time.

The first transaction of 0.55 ETH, or $136.26, according to ETH's price at press time, was made at 5:47 am on Wednesday, according to data from Etherscan.

To make this transaction, the user paid 10,668.73 ETH, or $2.6 million, in "gas," as the transaction fee at the Ethereum network is called. A similar transaction was repeated at 11:30 PM later in the day. This time 350 ETH, or $86,712.5, were transferred for the exact same fees.

Gas is charged by miners on the Ethereum blockchain network based on the amount of computing it takes to verify a transaction. If the users agree to pay a higher gas price, the transaction becomes more lucrative to minersand is completed rapidly.

ETH Gas Station recommends paying $0.155 for a standard transaction that can take up to five minutes and $0.2 for a fast transaction that will be expected to complete in less than two minutes.

Paying $2.6 million for a transaction is extremely unusual and doesn't make operational sense, giving rise to speculation of accidental error, money laundering, or a technical glitch.

Some cryptocurrency community members on Twitter suggested that the transaction was more likely to be a technical error since the ETH transaction fee in both cases was exactly the same, which would be extremely unlikely to be an accident.

The transactions on blockchain can't be reverted, but the mining pool which verified the transaction can choose to return the money to the original owner by creating a new transaction. The first transaction was approved by Chinese mining pool "Spark Pool," and the second by "Ethermine."

Sparkpool said in a statement that it "has had the experience of handling similar issues properly. There will be a solution in the end."

Ethereum traded 1.2% higher at $247.75 at press time on Thursday. The apex cryptocurrency Bitcoin (BTC) was up 1.1% at $9,873.64.

2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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A Cryptocurrency User Paid $2.6M In Transaction Fee To Send $136 Twice - Benzinga

Launched soon after the 2008 financial crisis, the first ever cryptocurrency that took the world by storm was the bitcoin. Since then, over 3,000 cryptocurrencies have been mined and traded with a market capitalization of over $221 billion as per a report by Yahoo Finance. Fundamentally speaking, cryptocurrency is a digital or virtual currency designed to serve as a medium of exchange, which is aimed at decentralization and transparent financial transactions.

The ongoing COVID-19 crisis resulting in plummeting investment values in terms of equity, bonds and commodities have led to investors looking for assets that could withstand the slowdown triggered by lockdown and give them a run for their monies. While some hinge on the safety of government bonds, others are buying gold. Some investors in India have found Bitcoin attractive as a means to hedge the risks, diversify their portfolio and perhaps make a profit. Further, market experts believe that cryptocurrencies could remain untouched by the slowdown started by COVID-19 and may outperform other asset classes. One of the reasons is the non-correlated nature of cryptocurrency, which indicates that it is not directly impacted by the economic, geopolitical and pandemic like situations due to its decentralized nature.

Cryptocurrency Legislation in India

The Reserve Bank of India (RBI) took an over-protectionist stance and imposed a total ban in April 2018, which restrained cryptocurrency based activity in India in its entirety. This year, however, the Supreme Court quashed the RBIs ban on cryptocurrency transactions. Further, the court opined that in the absence of any legislative prohibition, the business of dealing in virtual currencies should be treated as a legitimate trade protected under Article 19(1)(g) of the Constitution, which affords a fundamental right to carry on any occupation, trade or business. However, as is often misconstrued by laymen, the Supreme Courts ruling should not be construed as one legalizing the trade of cryptocurrencies in India, as many laymen as have understood, rather the RBIs ban was smacked down due to its failure to pass the test of proportionality.

However, since the judgment, cryptocurrency-based activity on exchanges immediately shot up. In fact, Cashaa India, a crypto banking services platform, observed an increase of 800% in trading volumes in 2 days following the decision. Investment bankers at Goldman Sachs claim cryptocurrency as modern digital gold. Both gold and bitcoins are designed to be rare and difficult to acquire but the latters historical volatility makes it a risky investment option for many trader joes.

What other countries are doing?

At the outset, it is important to initiate a dialogue with Indian legislators and regulatory bodies and work towards creating a crypto-regulatory framework in India. In the recent past, the Greeks and Venezuelans were flocked to cryptocurrencies to protect their investment value from hyperinflation. Moreover, cryptocurrencies were recently legalized in South Korea and Japan., and many countries like Australia have a positive viewpoint. Moreso, countries like the UAE, Sweden, Ecuador also introduced state-backed cryptocurrencies to help them evade sanctions, ease accounting and reduce the cost for the nations.

Therefore, experts believe that taking a similar trajectory is likely to benefit India with a rise in blockchain-focused startups, more employment opportunities, and added avenues for tax collection. Having said that, price predictions have failed miserably and as much as it appears to be the ideal disaster asset, there isnt sufficient empirical evidence to reach a definite conclusion. The saying, "What goes up, must come down" as is applicable to stocks, bonds and commodities also applies to cryptocurrencies at large and regulation of this asset class will keep a check on underground trading in this regard.

In the current governments pursuit of a cashless economy backed by the Supreme Courts judgment setting aside RBIs ban on cryptocurrency trading implicitly supports innovation and is a major step in the right direction. Having said that, the industry is in its nascent stages and is wise for RBI to wait and watch how the crypto market handles its first financial crisis before incentivizing or disincentivizing cryptocurrency based activities, which could potentially impact financial advancement of the nation. Thus, meticulous implementation and regulation of the crypto market may be a boon to the India economy, but any oversight could have disastrous consequences on the economy starved for revenues in times of crisis.

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NEW YORK, June 15, 2020 /PRNewswire/ -- Chainalysis, the blockchain analysis company, and Fireblocks, an enterprise-grade platform for storing, transferring, and issuing digital assets, today announced a partnership to help financial institutions and cryptocurrency businesses ensure the transfer of digital assets is secure and compliant with regulatory anti-money laundering (AML) best practices. Starting today, the Fireblocks platform will utilize Chainalysis KYT (Know Your Transaction) to monitor cryptocurrency transactions in real-time, setting a new security and compliance standard for its customers.

Fireblocks' customers cryptocurrency exchanges, banks, liquidity providers, market makers, custodians, lending platforms, and more will now be able to leverage both platforms through the Fireblocks interface and API. The integrated software solution will send and receive AML approved funds, customize transaction policies based on assigned risk scores, and automatically log AML transaction reports to share with regulatory authorities.

"Both security and compliance are integral to building trust in the cryptocurrency industry," said Jason Bonds, Chief Revenue Officer, Chainalysis. "By bundling product offerings with our integration partners through the Chainalysis Partner Program, we are ensuring our customers adhere to security and AML best practices, ultimately making cryptocurrency more accessible for all."

"Fireblocks and Chainalysis share the belief that building safe and robust infrastructure for the cryptocurrency ecosystem is critical for institutional adoption," said Rob Salman, VP, Head of Business Development at Fireblocks.

Fireblocks provides financial institutions with a secure and scalable MPC-based wallet infrastructure and a digital asset transfer network for instant settlement, and asset rebalancing across 25+ exchanges. Chainalysis KYT helps financial institutions and cryptocurrency businesses monitor large volumes of cryptocurrency activity and identify high-risk transactions on a continuous basis. Real-time alerts on the highest-risk activity allow compliance teams to focus on the most urgent activity and fulfill their regulatory obligations to report suspicious activity. By integrating with Chainalysis KYT, Fireblocks will further automate workflows for financial institutions and cryptocurrency businesses, in this case to satisfy regulatory requirements.

About ChainalysisChainalysis is the blockchain analysis company providing data and analysis to government agencies, exchanges, and financial institutions across 40 countries. Our investigation and compliance tools, education, and support create transparency across blockchains so our customers can engage confidently with cryptocurrency. Backed by Accel, Benchmark, and other leading names in venture capital, Chainalysis builds trust in blockchains. For more information, visit http://www.chainalysis.com.

About Fireblocks Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing and issuing digital assets. The platform enables exchanges, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through patent-pending SGX & MPC technology. Fireblocks has secured the transfer of over $30 billion in digital assets and offers a unique insurance policy that covers assets in storage & in transit.

SOURCE Chainalysis, Inc.

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Cryptocurrency might have made a grand entry into the world of technology and finance as an alternative to the usual currency that we use. The earliest crypto enthusiasts used bitcoin mining as a technique to earn from this new craze.

However, it became known to them that the complexity of the mathematical problem increases with the addition of every node. It might not be sustainable for miners to employ the processing power and the electric power it takes to solve the maths problem to earn their crypto records through mining.

Adding to this, the extremely volatile nature of cryptocurrencies made it impossible for them to use the bitcoin and its kith and kin as valid instruments of transactions. The fact that the bitcoin was worth just $2900 in mid-September 2017 and its price skyrocketed to about $19,800 in December 2017, and again, plummeting down to $3300 in December 2018 speaks volumes about the volatility of even the most reputed and most recognized cryptocurrency.

Exploring alternative avenues of profit

This meant that crypto enthusiasts could no longer rely on cryptocurrency as a valid instrument of payment or more crypto coins through mining. There was a growing need for an alternate avenue for revenue.

Parallel to this, there were a lot of new cryptocurrencies that started to spring up because of the blockchain craze. As of this article being written, investing.com states that there are about 2945 cryptocurrencies operational.

What if the forex profit logic was applied to the crypto world? What if the volatility and the extreme degree of fluctuation in the value of different crypto coins could be used to conduct trading between coins to get a profit? The above questions are million-dollar questions. Literally! The answer to these questions lies in a cryptocurrency exchange.

What is a cryptocurrency exchange?

As the name implies, the cryptocurrency exchange is a platform where you can trade between cryptocurrencies based on their current value. The value is determined by the market, the demand, and the supply.

Based on the fluctuating prices, and using the science of probability and prediction, investors and traders can buy a certain crypto coin at a price and sell it later when the prices increase. Conversely, they can possibly lose money if the value of the coin drops. There are alternative schools of trading like short trading that involve selling a certain cryptocurrency at a specific rate and buying them later at lower prices.

The relevance of crypto exchange

In a crypto exchange, in addition to being an alternative avenue for income in the crypto world, it also presents a few marked advantages that further strengthen the stance of crypto and blockchain technology. Crypto exchanges are legally valid means of businesses, even in countries and jurisdictions where cryptocurrency might not be accepted as a valid payment method. This opens up an entirely new avenue for aspiring entrepreneurs to explore a new opportunity for business in the crypto realm.

Steps to develop your own crypto exchange

Crypto exchanges not only form a legally valid stream of business in the blockchain front but also present a lucrative opportunity with almost close to 0 possibilities of losses. Just like how the house always wins in a casino, crypto exchanges are bound to make a profit irrespective of the trader making a profit or a loss, and irrespective of them providing leverage/margin trading options.

However, putting together a cryptocurrency exchange software is no mean task. There are a lot of components that go into creating a perfectly functioning crypto exchange.

The legal aspects

The country and the jurisdiction in which your crypto exchange business will be incorporated as the legal entity place a major role in determining the success of your crypto exchange business. In some countries, crypto exchange businesses are completely illegal, and in some, it is legal provided it does not deal with investors present in that particular country. It is vital that your crypto exchange is legally compliant and does not face any trouble because of lapses in complying with the regulatory frameworks. In this pursuit, it is essential that you obtain your license that is required in the area of incorporation.

The commercial aspects

Creating a crypto exchange is a daunting task from a development and testing perspective. It does require quite a lot of talented professionals who know the trade and technology. Even outside the task of finding the right resources, there is an intense financial burden on the investors.

Therefore, you need to ensure that there are enough financial resources to support your crypto exchange endeavor.

Liquidity

Liquidity is one of the most important features for any exchange, leave alone crypto. Liquidity, by definition, is the measure of the ease with which you can convert your crypto assets into cash. In the context of an exchange, it is a measure of the intensity of activities on your exchange. The more intense your activities, the more liquid year exchanges! The liquidity in your exchange plays an important role in wooing prospective traders and investors.

There are multiple ways to enhance liquidity in a new exchange. You can emulate trading within the exchange, and the other is that you can connect your exchange to another third-party exchange using an API to showcase the transactions in that exchange.

Connecting with the bank

This is a critical step not because it is difficult but more because there is quite some meticulous thinking that goes into choosing the perfect payment partner for your exchange. Not every bank is comfortable in handling anything related to crypto, and your exchange falls into the same category. Therefore, you will need to find out with an uncompromising degree of precision if your bank supports crypto transactions.

Ensuring top-notch security

Crypto exchanges, in general, come with a degree of centralization, making it an easy and lucrative target for hackers and other malicious forces. Therefore, it is of paramount importance to ensure the security of your exchange by introducing features like two- factor authentication, and multi-signature wallets.

It is encouraged to keep the resources and funds of your traders locked away in cold wallets. The movement of funds between your hot and cold wallets should be simple, straightforward, and quick, so there is no compromise on the tradeability for want of security.

In addition to all of these, it is highly encouraged that you have a proper KYC/AML process in place, ensuring the interest of your traders.

Marketing your exchange

Cryptocurrency exchanges have started to present themselves as lucrative earning opportunities in the crypto space. Therefore there are a lot of exchanges that have been sprouting left right and center. To make your exchange stand out from the crowd, you will need to market it effectively. In addition to the classical marketing methods like search optimization, social media advertising, and content marketing, you can also talk about your exchange in places like crypto forums. These activities ensure that your exchange gets the right exposure and engagement.

Providing support

At a time when almost all exchanges provide the same kind of service, customer support is what defines the difference between a good exchange and a great exchange. Customer support should be made available for your traders through multiple platforms, including but not limited to emails, phone, and chat.

Detailing on the technology

When it comes to developing a crypto exchange, technology is at its core. The matching engine or the trading engine is considered the heart and soul of the crypto exchange. When it comes to the technical part, there are multiple options for you to proceed with. One is that you can hire a team of dedicated developers or even partner with a crypto development company that specializes in exchanges. You can also consider using open-source exchange scripts that you can customize according to your business requirements.

However, more than the two listed above, one of the most preferred ways to develop your crypto exchange is to use a white label crypto exchange software. These white label exchanges are effective both from a temporal and a financial perspective it will reduce the time taken to hit the market, and in a business like a crypto exchange, the quicker you hit the market, the better your possibilities of profit.

You can also be assured that your basic product is free from any bugs that might affect the core functions of your exchange.

Conclusion

A crypto exchange software is the confluence of multiple elements of technology and is a sure proof that even the most volatile cryptocurrency can still make an interesting option for making a profit through trading. With the presence of white label cryptocurrency exchange software, it only makes the possibility of getting into the crypto trading business easier and simpler.

All that you need to do is get in touch with a crypto exchange software development company, and they will take care to understand your requirements, create and customize the crypto exchange, and present it to you as a complete business tool.

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Creating A Crypto-Exchange - The Types & The Steps - YourStory