While sending Bitcoin or other altcoins you should be very careful about all the filled details before you click “send”.
But no matter how careful you are, sometimes a mistake can happen that makes you want to cancel or reverse your Bitcoin transaction.
The process involved in canceling or reversing a crypto transaction is a bit more complicated as there is no “cancel” button that automatically takes all the steps needed to cancel a transaction. It may seem a bit confusing, but don’t worry. Let’s go through the steps together.
How to cancel a Crypto Transaction
Make sure your transaction is unconfirmed
The first step is very crucial. You can’t cancel or reverse a transaction that has been already confirmed. Even if you need a total of 130 confirmations and only have one confirmation the transaction is irreversible.
This means that your transaction must still be placed in Mempool. Mempool is a place where unconfirmed transactions are waiting to be picked up by miners for confirmation. If you want to learn more about Mempool you can read an article about The Reasons Why is your Bitcoin transaction taking so long.
In order to check if your transaction is unconfirmed enter your transaction ID to a block explorer of your choice. I can recommend Blockchain.com.
A transaction ID is a unique string of letters and numbers that represent your specific transaction. And you can find it in your crypto wallet.
If the block explorer says “UNCONFIRMED” your transaction can be canceled. Otherwise, if you find any confirmation number higher than 0 your transaction can not be reversed. I.e. you won’t be able to get your money back.
Please note that even if you see “UNCONFIRMED” there is no guarantee that your transaction will be canceled. Your transaction may be still “picked up” by the miners during or after you have executed one of the following options to cancel a crypto transaction.
Two methods of canceling crypto transactions
There are two main options you have in order to cancel your unconfirmed transaction. The first option requires your crypto wallet to support a special protocol.
The second option can be done without any restrictions from your wallet. But it may be directly prohibited by the blockchain on which you make your transaction, as it often leads to fraudulent actions.
Replace by fee
Replace by fee or RBF means that you will replace one version of an unconfirmed transaction with a new one with a higher fee. And the new transaction will be directed to your own wallet.
You can not initiate Replace by fee “manually”. This means that if your crypto wallet does not support the Replace by fee protocol there is no way to initiate it yourself. And even though some wallets support Replace by fee, this service cannot be used for all cryptocurrencies. In principle, RBF can be used only for Bitcoin and Ethereum.
And as noted above, there is no guarantee that your first transaction, which you want to cancel will not be included in the very next block. It’s all about timing. If you find any error in your transaction, act as soon as possible.
How to use Replace By Fee
There will be an option to check on “Replace by Fee” or “RBF” in your wallet when you send the transaction.
This is what the feature looks like in the Trezor hardware wallet:
After that, you just have to replace your transaction in a fast enough time. In some wallets, the transaction will not be sent until you confirm it one more time with RBF turned on.
If your wallet does not support Replace by fee or you are unable to use it, you still may be able to cancel your Crypto transaction by Double Spending.
Double Spending
Double Spending essentially means that you spend the same Bitcoin or another altcoin twice.
To do this you must make a new transaction with an equal amount of Bitcoin but with a lot higher fee. And send this new transaction to yourself. We set the fee much higher because this transaction must be accepted by the miners before the original transaction in order to be canceled.
Basically, because you are spending something you don’t actually have, this is a very dangerous practice used by scammers. For this reason, most wallets and miners have some sort of protection against Double Spending. Therefore, there is a pretty high chance Double Spending is not going to work.
In practice, this is used in cases where a scammer buys something from a seller. He sends him the amount of cryptocurrency they agree on. However, the seller does not wait for the transaction to be confirmed and hands over the goods. By that point, the scammer already used Double Spending and send the same amount to himself, which in theory should no longer exist. And since a larger fee is set for the second transaction, it is sooner picked up by the miners. The miners can no longer “accept” the initial transaction since it has actually already been done.
And this is also why sending bitcoin to exchange or anywhere else requires a different number of confirmations. To prevent Double Spending.
Conclusion
I hope one of these two methods worked for you and you will avoid making mistakes in the future. As was said twice during this article, there is no guarantee that your initial transaction will not be taken by the miners anyway. And if it doesn’t work out, you will learn an important lesson about the unpredictability of the Cryptocurrency World.
But, what you should take away from this is that it is important to check your transactions carefully. As a precautionary measure, I recommend sending a test transaction with a smaller amount of cryptocurrency first, and if everything goes wrong, repeat the transaction with the originally intended amount.
The second thing you should take away from this is that Double Spending is actually not good. And it’s a good thing it’s not that easy to do. While you may be momentarily upset that your attempt to Double Spend was seen through by the blockchain or your wallet, it’s for the greater good.
FAQ about Canceling Crypto Transactions
Yes, but only unconfirmed transactions, still placed in Mempool can be canceled. In order to check if your transaction is still unconfirmed, you can use any Block Explorer, such as Blockchain.com.
There are two main methods to cancel Crypto transactions. Replace by fee and Double spending. While Replace by fee option must be allowed by the wallet you are using, as it is a supplementary protocol. Double spending can be used everywhere. However, Double Spending is frequently banned by crypto wallets or blockchain itself, as Double spending leads to the creation of invalid transactions. Which was often exploited by scammers..
Unfortunately, once confirmed crypto transactions can not be canceled or reversed. That’s why you need to be 100% sure of all transaction details before you confirm it.
