The adoption and usage of cryptocurrency are growing exponentially, and various crypto projects are built on different blockchains with different use cases. As a result, crypto transactions are executed differently. Typically, a crypto transaction occurs between two participants using their crypto wallet addresses. However, some cryptocurrencies built on blockchains require a different level of an instrument to execute a crypto transaction. Hence, you must provide additional information for safety purposes when exchanging these cryptocurrencies. This additional information is referred to as a transaction memo.
What is a Crypto Transaction Memo?
A crypto transaction memo or a destination tag is a separate field in the transaction details pane that can be filled with a distinct line of recipient information. The transaction memo serves as an additional wallet address feature and is a nine-digit number specific to each hosted wallet. Transaction memos are essential for identifying which customer to credit a deposit to use a specific tag or memo for many exchanges and wallets.
In contrast to traditional banking, where a user may choose to include a description with their transfer, which sometimes provides additional information about what the money is intended for, The message's subject matter could be anything from "For your trip" to "Debt payment" to "Get the course." Additionally, business owners frequently use this description to ensure compliance with tax audits, which can flag certain operations if they are not correctly identified.
Unlike traditional banking, which could be optional, a crypto transaction memo is mandatory to complete an exchange. And every exchange and wallet uses various terms to depict the mandatory information, but the security features are unaffected by the difference in names. Furthermore, the exchange on which the operation is being performed will determine how to add a transaction memo. However, most exchanges and wallets always add the transaction memo field by default once the pane of the transaction details is opened.
Why is it Important?
Some cryptocurrency exists that requires a minimum initial balance to create a wallet. As a result, most custodial exchanges use a single address for all users of these cryptocurrencies that employ transaction memo or destination tag technology. Therefore, exchanges with thousands of users use a few shared wallets among its users and then assign each account a distinct Memo so that they can separate and identify each user's funds appropriately. Hence, the transaction memo is important because it ascertains which existing individual account a given transaction should be assigned to and credited.
Cryptocurrencies with Transaction Memo
As previously stated, transaction memos are not used by every cryptocurrency because they only work for blockchain-based cryptocurrencies that require a minimum initial deposit to create a wallet. On the other hand, most cryptocurrencies on the proof-of-work blockchain protocol do not require or have the capability of having transaction memos because they do not always require an initial minimum balance to create a wallet. Therefore, cryptocurrencies such as Stellar Lumens (XLM), Cosmos (ATOM), Hedera Hashgraph (HBAR), Binance coin (BNB), and Ripple (XRP), Algorand (ALGO) XEM, and EOS all support memo fields.
Furthermore, transaction memos can be either numeric, alpha-numeric, or a combination of both. An Alpha-Numeric Memo contains numbers and letters, while a Numeric Memo only contains numbers. As mentioned earlier, all cryptocurrencies have their transaction memo peculiar to them. So, when carrying out any of the given cryptocurrency receipt or deposit operations, a true value must be entered for memos. And before sending your transaction, double-check the memo to ensure there are no mistakes. Hence, here's a table highlighting the mentioned cryptocurrency and describing each one's unique transaction memo nature.
|Stellar Lumens (XLM)||Alpha-Numeric|
|Hedera Hashgraph (HBAR)||Numeric|
|Binance coin (BNB)||Numeric|
Forgot the Transaction Memo?
When purchasing or exchanging cryptocurrency, the transaction memo must be completed accurately, or the exchange or the wallet may not process the transaction. This indicates that the money will probably be irrevocably sent to an unauthorized user. However, most wallets and exchanges always make the transaction memo field mandatory, making it difficult to forget. But if the transaction memo is wrongly entered, users' assets would be sent to another unauthorized user. So to ensure that your coins are processed quickly, choose the correct transaction memo before sending them.
How to See Your Memo For Crypto Transfer
If you are prompted to use a memo in your transaction, it is vital to request from the recipient what their memo is. The recipient should visit their deposit page as outlined below to see their memo.
If you're using the CCTIP wallet, for example:
Step 1: Log in to your CCTIP account
Step 2: Click on CC wallet
Step 3: Scroll down to the cryptocurrency you intend to receive; for the sake of this example, we'll use Ripple (XRP)
Step 4: Ensure you select the XRP network and not BEP-20.
Step 5: Your XRP receive address, as well as your memo, will be displayed.
How to Retrieve a Crypto Asset on CCTIP
When you forget to include the transaction memo, your deposit will fail. However, you can retrieve your cryptocurrency on CCTIP by providing the transaction information to the customer support service.
Follow these steps to solve and retrieve any crypto asset relating to a memo on CCTIP.
CCTIP customer support will immediately work to help with the process of retrieval and try to resolve the failed transaction as soon as the provided information has been received.
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