As any newcomer will quickly notice, crypto transactions are irreversible. There is no walkback option or cancel button. This irreversibility is due to the immutable or indelible nature of the technology behind cryptocurrencies called blockchain.
In crypto, immutability is a necessary evil. It makes it impossible for records to be modified, deleted, or modified in any way, form, or form once they go on the blockchain.
Crypto adherents extol immutability as one of crypto’s most revolutionary qualities because it solves the thorny problem of double spending and promotes censorship resistance by making it difficult to erase records, while critics say it’s one of its biggest pitfalls.
But when it comes to this, it is up to you as a crypto user to ensure the highest degree of security during crypto transactions.
Sending cryptocurrencies is a different beast
Crypto is not your ordinary currency, and the same goes for how it is moved.
Once you press Send on a transaction, no one can restore it. Not you, the government, the exchange, or your lawyer. A quick check on the first three exchanges shows that each one issues a warning to users about this.
Coinbase warns users: “Due to the nature of digital currency protocols, transactions cannot be or be changed once initiated.” It adds that “users need to be careful when sending funds as transactions cannot be reversed, other than asking the recipient for a refund.”
The last resort proposed by the exchange is the only known way to attempt to retrieve the encryption that has been sent. The only way to do this is if you know the recipient and would still rely on their goodwill.
Binance warns that it is “unable to locate the recipient of your funds” in case you sent them to the wrong address, while Kraken warns users to “always be careful when withdrawing cryptocurrencies, noting that once a withdrawal is marked as Success “it is impossible to cancel or reverse the transaction”.
The point is that making a single mistake can cost you money. Fortunately, implementing some basic security practices can avoid this. Before we look at it, let’s look at the entire cryptocurrency sending business.
How to send Crypto
The process of submitting cryptocurrencies may seem complicated if you’re new, but it’s actually relatively simple.
Crypto transfer services are no longer limited to the niche: several non-crypto services now allow people to send encryption. One such service is Cash App, a mobile money payment service created by Block Inc.
Through the Cash App, users in the UK and US can send Bitcoin in the form of USD as little as $1 to family and friends via text or email. You can also send BTC on-chain or using the Lightning network.
Another way to send cryptocurrencies is through an exchange. If you don’t already have an account, your first step would be to create an account, followed by funding the account with a card, bank transfer, or PayPal, depending on the exchange. The rest of the steps would include:
- KYC verification (ID, proof of residence, etc.).
- Buying cryptocurrencies from the exchange
- Send money to the recipient’s wallet address
- Confirmation of receipt.
- Encryption will appear in the recipient’s account for a few minutes to several hours, depending on network congestion. You can also check the status of the transaction at any time. For example, if you are sending BTC, visit https://live.blockcypher.com/btc/ and paste the transaction ID or receive address into the search bar. They probably received the funds if the transaction has at least three confirmations.
Test your transactions before pressing Send
By now, you already know that double checking and even triple checking the recipient’s address before pressing enter is crucial.
A safe way to do it? Send a negligible amount to the address before the actual transaction. You can also practice sending cryptocurrencies to yourself until you learn to follow best practices.
Here are some other best practices for sending cryptocurrencies:
- Double-check the address: Hackers are known to hijack copied addresses to the clipboard and replace them with malicious ones. Be sure to double-check your address before sending money. At least confirm the last four digits of the address.
- Copy, don’t type: When sending cryptocurrencies, consider pasting the address instead of typing it. Typing carries the risk of getting keylogged and increases the risk of a typo, which could cause you to lose money.
- Don’t use public WiFi: Free WiFi in public places can be tempting but also risky. Hackers usually set up fake WiFi routers to target and intercept user data, such as online wallet data. Even if you think you’ve fortified your wallet with security features, it’s not worth the risk.
Transaction fees and network compatibility
There are a couple of things to consider when sending cryptocurrencies: transaction fees and network compatibility.
Transaction fees: Networks that rely on mining, such as Bitcoin, are maintained and protected by computer nodes called miners scattered around the world. Miners are rewarded with Bitcoin and transaction fees, which are automatically deducted in the process.
Usually, users can request faster processing of their transactions from the network, for which they pay higher fees than other users who rely on standard processing speed.
Wallet compatibility: Make sure the currency you want to send is compatible with the recipient’s address. For example, you cannot send Bitcoin to Metamask or Myetherwallet, which only support ERC-20 tokens. Sending your cryptocurrency there is like sending it to a black hole: it’s simply gone.
Sending cryptocurrency is a completely different game from sending fiat. Transactions are irreversible, which means that you need to be very careful when sending funds.
Follow best practices, regardless of whether you’re a beginner or an expert, and you’ll be less likely to lose your money. These pointers are common sense best practices to help you send cryptocurrencies securely.