Blockchain technology accommodates a highly diverse industry worth over $3 trillion. For illustration, that’s more than the GDP of Canada for 2021. The crypto industry counts around 10,000 active cryptocurrencies and a myriad of blockchain-based trading opportunities — from crypto brokerage services to derivatives, NFTs, and yield farming.
However, Bitcoin is still the cryptocurrency in this multi-functional ecosystem. In some way, it has built an image of digital gold by becoming a prestigious financial asset in business circles, even though its price is still prone to sharp bearish spells. After the glorious breakthrough in late 2017, it seems that everyone is dabbling in Bitcoin. Due to the high demand, the Bitcoin blockchain serves nearly 300,000 transactions per day, which can be really challenging for such an autonomous architecture without a centralized backup.
The decentralized establishment of the network leaves one of the most frequently asked questions of mainstream investors unaddressed — Can I cancel a BTC transaction if it hasn’t been confirmed yet? Since the blockchain doesn’t have a dedicated customer support team, we’ll try to give you an accurate answer in this short article.
How Does a Bitcoin Transaction Work?
From what we can see on the surface, you can transfer your Bitcoin just like any other fiat currency, although it might take you longer. The truth is that those digital coins don’t travel anywhere. They’re anchored on the blockchain and what is transferred is the ownership data. This data is generated and stored in your crypto wallet and then synchronized with the blockchain to process a transaction between two users.
So, you have some bitcoins and want to send them to another user’s wallet. The only access point for initiating a transaction is your Bitcoin wallet. Modern digital wallets feature rather intuitive navigation, so you can easily find the Send option on the software program or platform and send a request to the network in real-time.
The Cycle of a Bitcoin Transaction
Up to now, nothing seems to differ from a regular bank account transfer. Still, on the other side of the computer, there is an exhaustive process to ensure the transaction is processed safely and securely. Or in other words, this is where the “miners’ party” begins:
- Once you click Send, your transaction will be grouped in blocks with other users’ transactions, and it will stay in a mempool until the Bitcoin block is filled up to the predefined size.
- Then, the block gets labelled with unique data and that data is automatically converted into an SHA-256 hash. In the simplest terms, the miner’s computer (node) that will manage to un-convert the one-way function first earns the right to verify the transaction.
- The winning node adds the block to the blockchain. Once attached, we can say that your transaction is confirmed.
- Some BTC wallets and crypto exchanges like Coinbase and Bitbuy require more than one confirmation to complete the transaction. This doesn’t mean that the block containing your transaction needs to go through the same process several more times, but that you have to wait until a few additional blocks have been added to the blockchain for extra security.
Depending on the required number of confirmations and the current network traffic, the completion of a transaction on the Bitcoin network usually takes from 10 to 60 minutes. Each transaction that exceeds this threshold is considered an unconfirmed or pending transaction.
Why Is My Bitcoin Transaction Unconfirmed?
There can be a few reasons for the bleeping unconfirmed notification next to your transaction. Sometimes it’s just the network congestion. Bitcoin and other cryptocurrencies like Ethereum (ETH) and Litecoin (LTC), which are built on the same Proof-of-Work (PoW) consensus, are notorious for being unscalable. This means that in a rush hour, it takes the network a bit longer to complete your transaction because the number of transactions it can process in a given time interval doesn’t adjust to the number of user requests.
However, if you see the same status longer than a day, then maybe your transaction got stuck because of insufficient transaction fees. To explain, the root of this issue also lies in network overload. The thing is that for each transaction, participants reward the miners with a transaction fee. Unless you use a cryptocurrency exchange as an intermediate, you usually have the right to set the amount of the miner fee yourself.
It’s a simple rule, the higher the transaction fees you select, the faster you’ll get your transaction verified. So, If you go for the lowest possible rate, it’s technically possible for your transaction to be stuck on the blockchain forever. This doesn’t happen very often, but there was a time during the first big Bitcoin boom when miners could earn a generous reward of $50 per transaction. At this point, low-fee transactions seemed to be totally forgotten, waiting in the mempool for weeks.
Can I Cancel an Unconfirmed Bitcoin Transaction?
As you can see, Bitcoin employs complex automated mechanisms to maintain a robustly secure environment combined with the computing power of all network participants. Participants or miners don’t coexist in a hierarchical system, which means that no one is proclaimed superior over others. Yes, the stronger miners get to verify the block faster, but the mining-power supremacy doesn’t allow them to invent new rules or modify the transaction whatsoever.
Hence, once you broadcast a send request to the blockchain, you can’t cancel your transaction at any point of its journey. That’s exactly why we say that cryptocurrencies are an immutable and trustless form of digital money.
How to Cancel an Unconfirmed BTC Transfer?
Even though broadcasted transactions are immutable at their core, there are a few “helping hands” in case your bitcoins get stuck in the pending zone.
Replace by Fee (RBF)
The RBF protocol allows you to pull back your transaction from the queue but not by cancelling it. Instead, you re-order a higher fee double-spend transaction or, in simpler terms, get permission to replace the transaction fees and earn a privileged position in front of the miners, as explained in the previous section. This method is a typical example of double-spending, which is against the basic blockchain principles, yet it’s very likely to work in high-traffic circumstances — the change you’ve made will immediately catch the attention of awake miners.
To try out this method, you must first check whether your transaction is classified as RBF allowed. Some wallets and blockchains like Bitcoin Cash, for example, fully reject this technique calling it harmful.
Child Pays for Parent (CPFP)
This approach is also used for transactions that were initially set at a low-rate fee, but it’s a bit more risky and complex in nature compared to RBF. Namely, to save the low-fee deal, you can initiate a new transaction and pay the transaction fees with the bitcoins from the stuck transaction. Thus, you will “force” the miners to settle the old transaction first if they want to gather the fees from the more lucrative one.
This type of “manipulation” is perfectly legit on the blockchain, but it’ll cost more money in miners’ fees than the initial calculation and hence, negatively affect the trade outcome. Finally, not all crypto services allow the child to pay for the parent. If you’re convinced that this method will work well for your trading needs, turn to the good old Electrum wallet or the Mycelium mobile wallet app.
A Few Words Before You Go…
Bitcoin has become a serious business venture — it diverted the investment world into a decentralized direction by presenting a viable financial system without interference from a corporate establishment and chargeback risks. The price we have to pay for decentralization is the lack of personalized support to give us the necessary assistance and feedback in such situations that are out of our control. At the end of the day, Bitcoin has shown that it’s worth that risk.