If you’re reading this article, hopefully it’s for research purposes and not because you’ve sent crypto to the wrong wallet. The reason for that is because, if it’s the latter, you’re not going to be very pleased with the answer you find here. If it’s the former, then that’s good, you’re doing your due diligence in learning about blockchain technology before getting too deep into the processes which you’ll have to perform.
The short answer to the question posed by this article’s title is: it’s gone forever. But, there is some nuance to that short answer which we’ll get to later on. First, let’s talk about whether crypto transactions are reversible.
Are Crypto Transactions Irreversible?
The short answer to the above question is: yes. However, there are some caveats. Cryptocurrency transactions only become irreversible once they are added to the blockchain. This means the transaction has to be processed by a miner or validator.
While there is no way to reverse a transaction once it’s added to the blockchain, you can cancel a transaction before it gets that far. The caveat here is that you generally have to be very quick to notice you’ve made a mistake in order to do this. While blockchain transaction speeds are often still not instantaneous, even a slow blockchain like Bitcoin will still generally have your transaction added within 10 minutes or so. This means that you’d have at most 10 minutes to realize you’ve sent crypto to the wrong wallet address and cancel the transaction.
To further complicate things, you can’t cancel a transaction on the Bitcoin network once it’s been broadcasted, which is right away (unless you’re sending from an exchange, more on this later). Not every network will let you cancel a transaction, but one of the biggest ones that does is Ethereum. Of course, the previously stated caveat applies, where you have to notice the error pretty quickly. But, many Ethereum wallets actually have a very simple cancel transaction automation built-in, meaning that if you do notice, you can pretty easily click the cancel button in your transaction history.
The way the cancellation works is that you’re actually sending another transaction, at a faster speed than the one you’re trying to cancel, but with the same “nonce”. A nonce is the transaction number from the sender’s address, think of it like an order number. Sending a second transaction with the same nonce, but at a faster speed, means the second transaction will be executed first. Since you can’t have two transactions with the same nonce, the first transaction will then fail when it reaches the network. This effectively cancels your transaction. You can then resend the funds to the right address.
So, yes, crypto transactions are irreversible, but they are cancelable under the correct circumstances.
Wallet Custody’s Role in Your Options
Now, earlier we mentioned that a Bitcoin transaction is broadcasted right away, but this isn’t always the case if the wallet in question isn’t in your custody (you don’t hold the private keys). When you’re sending Bitcoin from an exchange, there is generally a good amount of lag between when you make the request to withdraw the funds to an external wallet address, and when the exchange actually sends them, generally because they only process transactions at set intervals. This gives you a window to cancel the transaction assuming you notice you’ve made an error in time.
Depending on the exchange, there may be a very obvious cancel transaction option, but otherwise you’ll likely have to message their support team as fast as possible. Alternatively, if you’ve sent crypto to the exchange, but to the wrong address (let’s say you sent Bitcoin to the Ethereum address), it’s likely gone forever.
The only case where they can likely help you is if you just send an ERC-20 token (assets built on Ethereum) to an exchange that doesn’t support that specific token but does support Ethereum. In this case, even if it doesn’t show up in your exchange wallet, it will still be in the exchange’s custody because regardless of whether they support that token for buying and selling, an ETH address can receive any ERC-20 token. In this case, they’ll have to send you the assets back, likely for a fee.
Now, if you’re the custodian of all the wallets in question, you might have options depending on what exactly you did wrong. If you sent your Bitcoin to your hardware Bitcoin wallet, rather than an exchange like you meant to, then you just have to send it to the correct address once it shows up in your hardware wallet. The only cost is another transaction fee. This applies to any similar situation where it’s still the right asset, just the wrong address, as long as the address is still controlled by you.
If you sent it to some random address by mistake, even with the right network, there’s nothing you can do. If you send your Bitcoin to an Ethereum address, using the Bitcoin network, or vice versa, it’s gone forever and there’s not much you can do.
Tips to Avoid Making This Mistake
Now that you know your options, or lack thereof when it comes to sending crypto to the wrong wallet, it would be a good time to mention some tips so you can avoid having this happen to you. Below we’ve noted 2 tips that can help you keep your crypto transactions as error free as possible.
- ALWAYS DOUBLE CHECK THE ADDRESS IS CORRECT BEFORE SENDING THE TRANSACTION – Sorry, didn’t mean to yell at you, it’s just that important and the easiest tip of them all. Check the address is the right one, check again, check a third time if you have to, and make sure it’s the correct network to send it on. As long as the address is right, you’ll never have to worry what might happen if you send crypto to the wrong address.
- Label your withdrawal addresses on exchanges – This one is more so for users who send and receive a lot of funds using crypto exchanges. If you keep Bitcoin on a hardware wallet, but also use some on Ethereum as WBTC, make sure the addresses you’ve added to your exchange whitelist reflect what network or where the funds are going.
For example, if it’s your Ledger wallet, put something like “Ledger BTC”. If it’s for Ethereum or Binance Smart Chain, put ETH BTC or BSC BTC, just something to denote which network it’s going to. Most exchanges do have safety measure automations in place to inform you if you’ve entered an address for a different network too.
This tip can also apply to your addresses within the wallet, meaning you should label all your addresses within your Ledger (or whichever wallet you use) too.