“Bintense explores why cryptocurrency transactions can fail or be rejected: Expert insights

This article and its contents have been prepared and distributed to persons outside the United Kingdom. The information provided is not intended or intended for distribution to, or use by, any person or entity within the United Kingdom. The financial products and services referred to in this article are not appropriate in the United Kingdom. Cryptocurrencies are classified in the UK as restricted mass-market investment vehicles, which means that they are high risk investments and are not suitable for most retail investors.

Cryptocurrency transactions, while designed to be efficient and decentralised, can encounter a variety of obstacles leading to failure or decline. Understanding these potential pitfalls is essential for users to navigate the cryptocurrency landscape safely and efficiently. Below, the Bintense team delves into the root causes of failed or rejected cryptocurrency transactions:

Not enough money:

As in traditional banking, a common reason for unsuccessful transactions is lack of funds. A transaction fails if the sender’s wallet is short of funds to cover the amount of the transaction and the associated fees. Make sure you have enough funds in your wallet to sell and cover the transaction fee.

Network congestion:

Cryptocurrency networks, especially those with high transaction volumes such as Bitcoin and Ethereum, can experience congestion. At peak times, such as increased user activity or network usage, transaction processing times may increase or transactions may be delayed or rejected.

Transaction taxes:

In many blockchain networks, transaction fees must be paid to encourage miners or validators to process transactions. If a sender chooses a low transaction fee or forgets to include it altogether, miners may prefer other transactions with higher fees, which can result in delays or rejection of transactions.

Incorrect address or destination stamp:

Cryptocurrency transactions require an accurate recipient address or destination token. Even a small error, such as an incorrect character, can result in funds being sent to the wrong address or becoming non-refundable. Some blockchain networks do not have built-in mechanisms to prevent such errors, so users need to double-check the data entered.

Network upgrade or fork:

Periodic updates or forks in blockchain networks can affect transaction processing. During these events, network nodes may temporarily suspend transaction processing, resulting in delays or failures. Users should be aware of planned updates and plan their transactions accordingly.

Technical glitches:

Blockchain networks and related wallets, like any other digital system, are subject to technical glitches or errors. These problems, whether caused by software updates, server failures or connectivity problems, can disrupt the processing of transactions and cause failures or delays.

Regulatory compliance:

Regulatory compliance, such as “Know Your Customer” and anti-money laundering policies, is increasingly important for cryptocurrencies. Transactions that do not comply with these requirements may be rejected, mainly when large sums or cross-border transfers are involved.

While cryptocurrencies offer many benefits, including decentralisation and borderless transactions, users need to be aware of the potential causes of transaction failures or declines. Bintense is an online cryptocurrency exchange that allows the sending and buying of cryptocurrencies with fiat money, eliminating most of these challenges. In addition, staying informed about updates, following best practices and using trusted wallets can help to deal with these challenges.