Published on July 31st, 2018 | by Sunit Nandi0
Your Guide to Cancelling Bitcoin Transactions
Despite the controversies and lack of clarity on the usage of cryptocurrency, the adoption continues to rise. Along with Bitcoin, there are several other variants of cryptocurrencies you can use. While usage is not complicated, you need to get the basics clear. Sometimes, you may have to cancel a Bitcoin transaction and learning the nuances of the procedures can help.
How Bitcoin transaction takes place?
When you want to send your bitcoin to a recipient – you will have to publish the intention following which the nodes will scan the bitcoin network. It will validate you are the owner of that bitcoin, and it has not been sent to someone else earlier. Once your transaction gets confirmed, it is included in a chain of blocks and gets added to the previous block. Tampering or undoing a Transaction is not possible directly as this will mean re-doing all blocks that get added after. Usually, it takes ten minutes approx for transaction confirmation, but at times, it can take longer than that. Low fee transactions take longer to be confirmed. It may be possible to cancel transaction if the deal is unconfirmed.
So, how Bitcoin transaction can be cancelled?
At times, you may end up wrong amounts through bitcoin transactions and choose the wrong recipient too. Undoing such transactions becomes a priority. Owing to the operation mechanism, it takes some time before a cryptocurrency transaction is confirmed. During this time span, a few procedures can be deployed to reverse a transaction. However, these are not very simple.
To check if your transaction is confirmed or not, enter the transaction ID in block explorers such as Blockchain.info and check status.
RBF- Replace by Fee
Some Bitcoin wallets now support the RBF protocol. This enables you to replace the original transaction with a new one that has a higher transaction fee. This will invalidate the first transaction. The steps include:
- Find the first transaction using a blockchain site
- Use coinb.in tools for replicating the first transaction but use higher fee.
- Then copy inputs and outputs of the first transaction and find the unsigned text of new and duplicated transaction.
- Sign the new unsigned transaction. Get the private key of the transaction address source. This is used for signing the transaction.
- Then you can Broadcast transaction. This will cancel the old transaction.
The other option to cancel a Bitcoin transaction is going to cost you a bit.
You will have to create a new transaction which has equal value of the first transaction. Send this second transaction to yourself. Ensure the new transaction has a higher fee than the first one.
You may have to use a separate cryptocurrency wallet this time. You may also have to use specialised software that supports double spending. Miners will then pick up the second transaction, and as a result, your Bitcoin will revert to your account. However, keep in mind some wallets, and most miners have safeguards against this method.
Summing it up
Remember that the cryptocurrency transactions are designed to be as irreversible as possible while the methods to cancel transaction for Bitcoin usually work. So, it is better you check the details of such transactions before finalising.