Topic: Binance is spamming mempool (Read 772 times)

Popcorn on standby. Let's just ignore the fact that they are desperately consolidating everything because they aren't sure if they actually have "proof of reserves", or the $2.7 billion in Tether they moved out of their "proof of reserves" wallet less than 24 hours after they published their "proof of reserves".

Of course it is better for them to batch their transactions, but they way they do it is moronic. There is no need for them to consolidate everything at the same time while paying a fee far higher than needed. They could very easily have a system which broadcasts a large consolidation transaction every 10 minutes paying 1 sat/vbyte, instead of dumping 200 vMB of transactions paying 14 sats/vbyte all at once. But as I said above, they don't care because it is the users who are getting fleeced here, not Binance. There is also nothing stopping them from creating a batch transaction which consolidates deposits and pays out withdrawals at the same time, rather than create twice as many transactions as needed to consolidate first and then pay out later.

They have done this kind of thing before, but I think this the largest they have ever done and the timing is obviously not a coincidence. There is stuff happening behind the scenes we are unaware of. As always, get your coins off exchanges and in to your own wallets.

Had no idea Binance was responsible for fee spike the last couple of days (though I've been getting by still with very low fees and waiting and it is a far cry from 100 sat estimates of years past).

Not sure I understand why that causes panic and fear? Won't people be happier if Binance does batch txs for withdrawals from larger inputs? More txs in a batch, less space taken up when the Binance bank run happens if it does?

Don't know enough or can look at data far back enough to say this is deliberate or just periodic or intermittent. Still feel like it's posts like that that do more to spread FUD (since people wouldn't otherwise be aware anyway), which is a shame as they're really quite informative.

As pointed out above, exchanges don't really care about fee overestimation either since the cost is passed on to the consumer (not to mention majority of fees for the past 3 years at least are pure profit).

People have been putting up with crap exchanges since exchanges existed. But, so long as people use them they will keep doing what they do.
Really starting to wonder how much of why people think BTC is a scam / ponzi / whatever is because people like us give them a decent understanding of it, how it works and so on. And then they see something like Binance and wonder what the f--k is really going on.

Pick your saying, "there is a sucker born every minute", "there is an ass for every seat" whatever.

Either way, the mempool is empty now so outside of a few days where it cost a few cents more to move money it's all over, for now, until they again do something stupid.

-Dave

This has been evident for quite some time. They regularly broadcast both withdrawal transactions and internal consolidation transaction which pay fees up to 100x higher than necessary. It's taken them 5 years to finally start to update to segwit and save themselves a third on all their fees (although I'm certain they won't pass any of that on to their users). It's easy to run a horrendously inefficient system when you are ripping your customers off to the tune of 50,000 sats per withdrawal, when 500 sats would more than cover it though. They can continue to pay their ridiculous fees and still simply pocket 95% of every withdrawal fee as pure profit.

Never ceases to amaze me that Binance users put up with this. It is theft.

As of now 3:45 PM EST on 19-Nov-2022 1 and 2 sat TXs are confirming and there are about 30 blocks till the mempool is empty.


No they ran a 0 reserve. Fractional implies there was SOME money there :-)

As for the Binance TXs. I am starting to really think their coding is just really broken. I just did a withdraw from another exchange and it came from what was a deposit from someone else. Only had 2 confirms before it was sent to me. How much back end coding does that really take.

User 1 sends 0.1 to exchnage

User 2 does a withdraw for 0.025
User 3 does a withdraw for 0.025
User 4 does a withdraw for 0.010

Send users 2 3 and 4 coins out from the 1st users deposit. Send the rest (minus fees) to the storage wallet.
Coin control it's a thing. Accurate accounting so you know what addresses you control have how much BTC in them with a quick database is also a thing.

-Dave

if binance(CZ) was spammng the network by respending the same coin alotment every block. then yes baaaaaadd

if he is just sweeping lots of different coin allotments and its a case of there just being say 25m users deposits to move.. then thats just bad management of not doing it progressively over time instead of rushing it all in one go

as for the FTX stuff
FTX dun goofed and defrauded people. binance just whistleblew it

yes as a business i see him taking advantage of opportunities that present themselves. but wht business doesnt

FTX caused the problem because FTX was running a broken fractional reserved business that leeched/syphoned its customers funds away

yes other businesses should sweep deposits regularly into cold wallets instead of periodically
yes they should also show reserves (bitcoin addresses) clearly at all times of said cold wallets
and ultimately yes users should withdraw coins after they have done their in-exchange activities

but here is the thing. if binance was to release its customer coins as withdrawals to all users of 25m customers just once a month..
the congestion would be 3x the usual tx count for that entire month

meaining it would take 3 months for the congestion to settle

bitcoin network tx count cant cope with an exchange sweeping daily
this ends up that exchanges can only sweep once every 3 months to reduce/prevent congestion

bitcoin needs to scale to allow 100m people to even just p2p daily or just weekly without congestion
yep if you add coinbase 60m customer and binance 25m plus other popular exchanges. and one day say lets all just get coins off an exchange and just p2p it from now on.. thats 100m+ people that need to use bitcoin network regularly

I should have brought up this topic before now but I choose to keep quiet because I believe everyone is already aware of the shady approach used by Binance to take the advantage of the situation just to increase their own benefit and I have a reason to believe CZ is the one behind it all after I read some of his promotion tweet about Binance and Trust wallet ever since the FTX issue happened.
I believe this is the CZ approach to misappropriate and also gain people's trust.

Whatever you think why binance is doing this, i would call this a shady move. We know they have a lot of bitcoins and they can do anything from hunting stop losses to now spamming mempool. Some people might get confidence that since funds are moving in binance, means this exchange can be trusted to keep your funds in this exchange.

Do you think is this a good move by binance  Faking volume and faking funds in exchange cannot be good for long term and will not be a sustainable move.

Withdrawal fees increases, or decreases in Binance depending on network congestion, and because it is said that Binance is spamming the mempool, causing congestion, I change me opinion. It wouldn't be truly paranoid to say that they're doing it on purpose to stop a bank run. But we don't want another bank run. It's probably good to slow everything down for a few days and stop make everyone calm.

segwit is not actually real harddrive/bandwidth byte data length much different to legacy.
the code manipulation of miscounting certain bytes is just a couple lines of code of /4
segwit is not cheaper due to actually being 4x less bytes per transaction (the lame 1990's hard drive/bandwidth bloat excuse of why bitcoin should not progress)

its just cludgy math to try to promote people to use segwit out of a faked discount devs decided on as their arbitrary numbers of their dev politics. rather than actual numbers of real decision basic on physics/reality of real world utility

if you read the code its not a discount. instead all that cludgy math is doing is making legacy a premium by doing the tx fee policy of *4 legacy costs
....

the 2 main demands/requests the wider bitcoin community (outside the exchange economical node and sponsored dev mini "community") was:
a. fee's not increase to amounts the unbanked(3rd world) see as daily wage
b. more transactions per block to allow more users to use bitcoin without congestion

checking the fee's chart of the last 6 years(2016+) and the transaction count of same period
transaction counts have not grown. but fee's have

thus segwit did not solve either
segwits real purpose and need for activation was not more onchain tx and less fee request solution.

instead it was to have a tx format that allows gateways to alternate networks. to push people away from using the bitcoin blockchain for utility. meaning they have no real need to be full nodes due to lack of daily use of the bitcoin blockchain. thus also causing less full nodes to be used. and yep that includes pruning nodes so that there is less of a pool of full nodes able to offer blockchain data to other nodes that are initial block downloading
the ratio of USERS:businesses of full nodes has filled more to the business side due to segwit than any data scare store has

..
as for binance charging fee's for withdrawals. (0.0002)
if they were doing solo tx of 1in 2out to pay out to a user, then they could charge 0.00000226+(~1sat/byte+) 1000x less
of what their fee is (or 1ksat to cover their internal deposit sweeping to cold and then cold to hot for withdrawal movements)

because they 'batch' withdrawals where the outputs only account for ~33bytes(+ a % share of the input data) they could be charging as low as say 0.00000040 per withdrawal as a representation of 1sat/byte
when doing a 2in 100 out tx(3700bytes / 100=37)

but if looking rationally
they would want to re-coup the costs of sweeping deposits from hot to cold and then cold to hot prior to the withdrawal. which would just be a 2-4x of the amount.
so lets call it a 160sat per withdrawal at a rate of 1sat/byte to also give them a lil small profit margin(the round up) on fees
which if looking at the congested rate of network fee of 100sat/byte
is 0.00016000, which is not much different to the
    0.0002 (disclaimer.. they are the cause of the congested 100sat/byte. thus this 0.0002 should be the exception.. not the rule (max not min))


..
as for those saying exchanges should implement LN to the off ramp people out of an exchange and into LN as oppose to a self custdy bitcoin utxo.. are you friggen kidding me

having value locked in exchange "hubs" is like saying you want to givve people WBTC (sidechain) value.

the purpose of actually withdrawing is for true self custody. not some new altnet co-custody arrangement system that requires middlemen to be only to process payments

seriously. it seems people dont understand what real bitcoin network features are, and trying to find convoluted ways to push people away from using the actual bitcoin network features and also trying to prevent the bitcoin network from expanding to allow more utility with silly 1990's excuses, pretending that hardware bandwidth is 20 years ago. and smart contracts of 210 years ago are the solution to bitcoin..

A distinct possibility. As I mentioned, perhaps their attempted proof of reserves (which doesn't actually prove anything) has exposed a hole in their finances, and now they are scrambling to figure out if they are actually solvent or not.

Let's just point out again that such a ridiculous withdrawal fee is completely artificial; an arbitrary number picked by Binance which could be 99% lower and still cover the network fees.

Which is exactly the point of these fees. They don't want everyone withdrawing because they can make more money if you don't, and they might run in to a liquidity crisis if you do. So set astronomically high fees and know that the majority will just leave their coins on the platform.

If you would read around, you would have been seeing this explanation of mine:


Also, if you would have been looking on the actual topic, you would have seen that people are trying to see what are Binance's reasons for this move, not actually about the congestion of the mempool.
But instead you chose to be political. And lame.


Indeed, it would be great, although I still have a feeling that this move was meant to hide something under the carpet.

And I don't agree fully with your stance on legacy addresses. They are still good and should still be used by people. Many have old wallets they don't change for security reasons, many have collectible items funded on legacy addresses. Of course, many use legacy simply because they lack certain knowledge, but they will learn. So the individuals still using Legacy are okay imho.
On the other hand services like Binance, services that create a great number of transactions should have been migrated to SegWit long ago. They would have saved quite some money with that. Actually now they should already implement LN. So it's a good step, but already late.

Good finding and previously I did not notice it too. Just thought the last information in the table is for Withdrawal fee for both horizontal and vertical views!

If you use mobile and see it horizontally or vertically, you will have different tables with different formats and details. I can confirm by making screenshots below.

Binance did not change their withdrawal fee for both Legacy and Segwit addresses but their spam on mempool in this period is suspicious.

They can go with a hack and an exit that can be a scam exit too. In the past, many exchanges were hacked and shut down a few months later. From Cryptopia to Livecoin exchanges (more definitely).

More information about exchange hacks and exchange graveyard. I want to share a proactive warning  

• Exchange graveyard. FTX is in the list already.
• Hacked Exchanges since 2011

majority didnt.. mandatory code activation decided along with a coalition of economic nodes(exchanges and corporate sponsored devs). and it was that small(in numbers, but large in social popularity) that caused the split..
try to read bitcoin blockdata of july/august 2017
try to read bip and code.. then you will learn what actually happened

I rather think it is no coincidence when it comes to Binance.  They sure know what they are doing and it is not the first time they are doing something that logically triggers panic.

If the people wanted the change, Bitcoin would of had the change by now.  Is this not the reason Bitcoin split into Bitcoin and Bitcoin Cash years ago?  Everything happens here with consensus of the community, and while I also wish Bitcoin had smaller fees and an increased capacity, the majority decided they want Bitcoin to stay Bitcoin.

-
Regards,
PrivacyG

If that is the case then I do agree that it would be a great deal. I understand that there are still a few people who rather use the legacy ones, but they need their hands to be pushed in order to either move to segwit, or just not be involved with the mainstream crypto anymore.

There are still some people who like to use monero and such privacy coins as well and want to hide their wealth too but that doesn't mean that they would be good at it neither. Which is why I believe that we shouldn't be really focusing on those people and look at what the general public uses. Segwit is what almost everyone is using and Binance should promote that a lot more.

Of course, 0.0005 for a withdrawal to SegWit btc address seems very expensive for those who only have small amounts of bitcoin. The withdrawal fee is equivalent to $8.27 for the current bitcoin price, obviously it is very expensive and seems so discriminatory for SegWit.

The only thing that is going to be popular nowadays among small traders not to withdraw their bitcoin from binance is the expensive withdrawal fees. Really, I would think this is not the right time to withdraw $100 in bitcoin to my electrum wallet.

It could also be because as I said earlier their coding is so bad, they don't know what they have. Lots and lots of wallets all over the place, a database out of sync with them, knowing they have 'enough' in cold storage but now they are all in a panic because they have to be sure. I know it's an old saying but never attribute malice to something if incompetence is just a likely.

"Real" financial institutions have more security and programmers working for them then binance has staff.

They have been hacked several times, had the issue on the cross chain bridge last month. And so on.

They might have the funds, they might not, they might not even know....

-Dave
 

If that is really the case it would just prove that there are idiots working there. For one the timing is bad and for two they are spamming the whole network instead of doing it over a longer period of time.

Just want to point out I'm not paranoid about anything, because I don't store a single satoshi of my money on a centralized exchange. Every exchange in the world can go bankrupt if they want - my bitcoin will be just fine.

I don't think it is. Binance started to publish their "proof of assets" bullshit last week. Then it all went silent. Perhaps they are scrambling to consolidate everything they can because right now they don't actually have proof of reserves. Or perhaps they are also having a liquidity crisis due to mass withdrawals, and are rushing to refill their withdrawal wallets. They could have done this gradually over the last several months and paid 1 sat/vbyte for it all, but instead they choose to do it all right now to do it and spend a huge amount on unnecessary fees to get it done? Not a coincidence.