This
article is part of our ongoing series of Support Team Tips, where
we tackle some of the most prominent questions our support team
receives. In this post, we cover one of the most common questions we
receive about bitcoin transactions, can you cancel or reverse my bitcoin
transaction?
The
short answer to this question is no, we can’t cancel, reverse, or speed up a
bitcoin transaction.
Why not?
To
elaborate further on why, we’ll provide some important information to explain
how bitcoin works, and how it compares to other payment methods.
When
bitcoin was created, it was introduced as a public, distributed peer-to-peer
electronic cash system. And in order for bitcoin (the
currency) to succeed without a third party like a bank to mediate, verify,
and manage transactions, the concept of a blockchain ledger was developed
alongside the currency as a way to verify and track transactions and prevent
fraud. Settlement with a high degree of certainty is a requirement for a
payment system to function. Otherwise people could make transactions, receive
goods, request funds back, then make more transactions. Bitcoin is portable,
fungible, divisible, and irreversible. Payment methods like credit cards also
include some of these properties, but their transactions are not irreversible. A
credit card transaction can be reversed in the form of a chargeback, which can
happen days or weeks after a transaction has initially processed.
Unfortunately, this comes with friction and costs because the network has to be
maintained by an intermediary.
From a
merchant’s perspective, bitcoin presents an
increasingly convenient alternative to credit cards that ensures they
can avoid the inconvenience of chargebacks, and cut transaction costs. For
the consumer, bitcoin also presents similar benefits, but it’s extremely
important to double check the recipient’s address and amount are correct before
sending your funds.
Bitcoin
shares some but not all qualities of credit cards, and the same goes for cash,
particularly where reversibility is concerned. You can pay for something
with bitcoin or cash and neither transaction can be reversed unless the
recipient returns the funds back to you.
Let’s
take a look at two scenarios to explain this further. One with bitcoin, and the
second with cash.
Scenario
1: You accidentally sent bitcoin to the wrong address.
Without knowing the identity of who controls the address you sent your funds
to, you have no way to contact the accidental recipient and ask them to send
the funds back.
Scenario
2: You accidentally dropped a $20 bill while walking on
the sidewalk and failed to take notice. Shortly after, someone you don’t know
picks up your cash and keeps it. Unless you were present to see
the person pick up your cash, you have no reasonable way to track them down and
retrieve it.
In both
scenarios, it’s highly unlikely you’ll ever see either forms of
currency again. While bitcoin does paint a clear path of where your funds
went (by looking on the blockchain), bitcoin addresses don’t have
conventional forms of ID associated with them like a first or last name, or
government ID.
To sum all of this up
Bitcoin
is designed in a way that changes how we’re used to transacting, particularly
with credit cards. Transaction reversibility, or chargebacks, is a process that
is not inherent or automated for bitcoin transactions. When individuals
transact, there is no third party interference in the management or deliverance
of the funds; the transaction is managed solely between the sender and the
recipient. In situations where you’ve accidentally sent funds to an incorrect
unknown address, or you’ve purchased something from a merchant and want a
refund, both cases require you to already have a means to contact the recipient
to request they send your funds back. In the case of buying from a merchant,
it’s likely they can issue you a refund, but in the former scenario
it’s unlikely you will be able to recover your funds.
In
addition to the irreversibility of bitcoin transactions, our wallet is designed
so that we have zero control over your funds, transactions, or chosen
configurations. You are in full control of the funds in your
Blockchain wallet, and that’s another reason why we are unable to interfere
with your transaction.
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