Though the black hole is five times the mass of the black hole at the centre of our Milky Way, it is inside a galaxy that crams 140 million stars within a diameter of about 300 light-years, only 1/500th of our galaxy's diameter.
The dwarf galaxy containing the black hole, called M60-UCD1, is the densest galaxy ever seen, researchers said.
If you lived inside of it, the night sky would dazzle with at least 1 million stars visible to the naked eye as opposed to 4,000 stars in our nighttime sky, as seen from Earth's surface, they said.
The observation also suggests that dwarf galaxies may actually be the stripped remnants of larger galaxies that were torn apart during collisions with yet other galaxies - rather than small islands of stars born in isolation.
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His team of astronomers used the Hubble Space Telescope and the Gemini North 8-metre optical and infrared telescope on Hawaii's Mauna Kea to observe M60-UCD1 and measure the black hole's mass.
The black hole at the centre of our Milky Way galaxy has the mass of 4 million suns, but as heavy as that is, it is less than 0.01 per cent of the Milky Way's total mass.
By comparison, the supermassive black hole at the centre of M60-UCD1 is a stunning 15 per cent of the small galaxy's total mass.
One explanation is that M60-UCD1 was once a large galaxy containing 10 billion stars, but then it passed very close to the centre of an even larger galaxy, M60, and in that process all the stars and dark matter in the outer part of the galaxy got torn away and became part of M60.
The team believes that M60-UCD1 may eventually be pulled back to merge with the centre of M60, which has its own monster black hole, weighing a whopping 4.5 billion solar masses (more than 1,000 times bigger than the black hole in our galaxy). The galaxies are 50 million light-years away.