We all know one of the main principles of the cryptocurrency blockchain – transactions cannot be cancelled and once the funds are sent, there is no way to return them. Some people consider this as a major fault of cryptocurrencies in general and the reason why cryptocurrencies like bitcoin, should be never used as means of payment.
But is it really so? The answer is, both “yes” and “no”. Let’s use bitcoin as an example. There are actually some possibilities to make the bitcoin transaction cancelled. However, these methods are quite risky.
In a centralized payments system, rules and regulations are established, as well as some verification procedures that should be followed before the transaction is cancelled. As bitcoin network is not governed by anyone, cancelling the transaction is a tough task to do. Don’t expect us to point to the “cancel” button.
Let’s go for some theory. As bitcoin network is protected from “double-spending” by decentralization of mining process, every transaction has to get confirmed by the network itself. It means, that before being added to the new block that is being currently calculated by some miner, or as it is simply called – confirmed, the transaction doesn’t really exist and there’s only the “request for confirmation”. This is the exact moment when it still can be cancelled.
There are only two methods: Replace-by-Fee (RBF) or double-spend. But remember, before you start, you need to check whether the transaction has a confirmation. Once confirmed by at least one node of the network, it cannot be cancelled at all. First, copy the transaction hash into the blockchain explorer and find the number of confirmations. If there are no confirmations, then we can proceed.
Using the RBF method, you will have to make a new transaction with a miner reward that is higher than the previous one. This will change your transactions and return money to your wallet. You need to check if the wallet you are using supports the RBF method before trying it.
Using the double-spend method, the user must send the exact amount of coins of the old transaction to his personal wallet with the transaction payment higher than the previous one. It will cause the second transaction to be of higher priority for miners, so it will be processed before the first one. Another thing to consider is that the balance after the second transaction with higher priority should leave fewer funds than required for the first transaction. The first transaction will be cancelled due to insufficient funds on your current wallet.
Both methods are quite risky as the transaction might get confirmed before any of these methods will be used. We recommend double-checking all the data before you start your transactions