UNEXPECTED PROBLEMS CRYPTO USERS CAN FACE AND HOW TO AVOID THEM

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The crypto space is growing at an astronomical rate, and it is important for users to remain well informed. This article addresses some unexpected problems cryptocurrency users can face, what to do about them, and how best to avoid them.

1. Sending your cryptocurrency to the wrong address

Making a mistake while transferring your cryptocurrencies is one of the worst things that can happen to you as a crypto user. If this happens, your transfer can fall into one of three categories.  You could be lucky, and all hope could not be lost. This is because all crypto addresses have a fixed format and an address that doesn’t meet the criteria will not be validated.  Bitcoin addresses have between 26 and 35 alphanumeric characters. It is possible that your address could be so deficient that your string of characters did not meet the criteria for a bitcoin address. This way, your coins are still safe.

But if it turns out that the address is valid and managed by someone else, there’s nothing much you can do, except to hope. It’s like sending an unintentional bank transfer, only that in this case, your chances of recovering your funds are much lower, since bitcoin addresses are not tied to any real name or face. It is usually impossible to contact the person behind the address, so you can only hope that the person is nice enough to send you back your funds. What’s worse? You could have sent your bitcoins to an address that isn’t controlled by anyone.

All possible bitcoin addresses already exist, but most of them are not controlled by anyone and don’t contain any bitcoins. Any bitcoins sent to this address will be lost forever.  This is because, without a private key, no one can create a new transaction to return your coins. The best way to avoid this issue is to hold your own private key and keep your cryptocurrency in wallets controlled by you. Always use the clipboard to copy and paste addresses when sending currency on your PC instead of typing them manually, and always double-check the address to ensure that the characters match up before clicking on the send button.

2. Unconfirmed Transactions:

Unconfirmed transactions exist when transactions are left incomplete because they have not been included in a block. When it comes to bitcoin, it can take a while for a transaction to be included in a block. Bitcoin transactions are processed by miners, and miners aim to make a profit.

By mining bitcoins with higher transaction fees, they make more money. Block sizes are limited and only a certain number of transactions can be processed in a certain timeframe. In bitcoins early days, there were lots of free space in each block because there were not many transactions, but now that bitcoin has become more popular, transaction fees have increased. If you pay a high fee for your transaction, your transaction will be cleared much faster because the miner will give preference to the transaction with a higher transaction fee. Other unconfirmed transactions with lower fees stay unconfirmed and wait for their turn. In short, the lower your transaction fee, the lower the priority of your transaction and the longer the confirmation will take. If you find yourself in this situation, the best thing to do is to be patient, if your transaction gets stuck, your funds will be restored to your bitcoin wallet. This might take up to 14 – 21 days. You can also request miners to confirm your transaction in a bitcoin pool website or a bitcoin talk forum.

Sites that claim to speed up unconfirmed transactions are usually scams or a mere waste of time, so avoid those services.

To avoid situations like this in the future, always set high transaction fees for your transaction. If your wallet prevents you from setting high transaction fees, upgrade to a better wallet. If you are transacting from an exchange, ask exchange support to set a high transaction fee for quick confirmation. You can check how many transactions are pending on bitcoin explorer, or by sending a small amount as a test run to see how fast your transaction is processed before making a decision.

3. Losing Your Private Keys

In the crypto world, ownership of crypto is determined by who holds the private keys to these assets. A private key is a secret alphanumeric password or code used to send your bitcoins to another bitcoin address. Private keys are used for making irreversible transactions. They are the keys to spending and sending your bitcoin to anyone anywhere.

So, if you lose your private keys, you no longer own your bitcoins.  Storing this code in the clouds could be disastrous if it gets hacked, storing them on your phone could be futile if your device is lost, stolen or damaged.  A wallet “stores” these keys and many wallet types are out to serve this purpose. Some wallets allow private keys to be stored and guarded by the user; others keep private keys safe on behalf of the user.

It is best to study all the wallets, and select the one that is best suited to your needs. Most of the web and mobile wallet services in the crypto market store private keys on behalf of their users. They are stored in an encrypted form which only users can decrypt.  Some of these wallets include Coinomi, Edge, Breadwallet, etc.

Desktop wallets are relatively safe. You will get your bitcoin address and your private key in a downloadable and importable file once you install the wallet on your laptop. These keys can be stored on a memory stick or hard drive. If you lose your files or private key, you lose your bitcoins. Some desktop wallets include Bitcoin core, Jaxx, exodus, electrum, etc.

Hardware wallets store your crypto offline, taking away the risk of it being hacked or corrupted. They are tamper proof and come with a limited user interface, and if you have the backup code, you can recover your bitcoins if the device gets destroyed. Some examples are Trezor, Ledger Nano S, etc. Whatever wallets you decide to use, it’s best to do your due diligence and be as careful as possible

4. Falling Into The Hands Of Cyber Criminals

The crypto market has always been plagued with cybercriminals of varying degrees. There have been many high profile cryptocurrency hacks and many traders and investors have lost their funds as a result. Today, cybersecurity is a $125 billion industry, and cyber attacks have shown no signs of stopping. Some of the common cyber-criminal activities surrounding cryptocurrencies include Cryptojacking, Ransomware, Exchange Hacks, Phishing Attacks, and even twitter impersonations.

To counter and avoid these cyber attacks, proper safety measures must be put in place.  The sentence “prevention is better than cure” has never been more true in this.

Here are some tips to help you stay protected from these cybercrime activities. First, never download attachments from senders you neither know nor trust. These attachments could contain harmful files bound into them. Even a funny looking jpeg image could have ransomware attached to it. In many cases, these files have carried spyware, virus or malware.  Many times, ransomware is spread by mail, so it is very important to not download attachments from untrusted sources. Secondly, nothing is free, so don’t fall for anyone promising freebies online. Many users still fall for con men on twitter pretending to be Elon Musk or Vitalik Buterin, asking them to contribute some amount with the promise of unrealistic multiplications in return. It is also necessary for you to set up 2FA security. This ensures that even if your password is compromised, hackers cannot access your cryptocurrencies without having access to another device that you possess. Regularly back up your data, and if possible, use hardware wallets.

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Wrap Up

Have you encountered any of these problems before? How did you resolve it? Let me know your views in the comment section.

Hanna Pindza

Hanna Pindza has been an entrepreneur for more than 14 years. she has unparalleled experience in wealth building, financial coaching, and leadership.

She is passionate about improving the financial and economic standard of Africans particularly women.

Hanna Pindza
Hanna Pindza
Hanna Pindza has been an entrepreneur for more than 14 years. she has unparalleled experience in wealth building, financial coaching, and leadership. She is passionate about improving the financial and economic standard of Africans particularly women.

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