In the world of cryptocurrency, a tiny error can lead to huge losses. These mistakes, often called "fat-finger" errors, happen when someone types something wrong during a transaction. Unlike traditional banking, where you might have a chance to cancel or correct a mistake, crypto transactions are immediate and irreversible. This article will go over some famous fat-finger errors and offer tips on how to avoid them.
What Are Fat-Finger Errors?
Fat-finger errors are simple but costly mistakes made during financial transactions. They usually happen when someone accidentally inputs the wrong information—like sending money to the wrong address or paying way too much in fees. While these kinds of errors aren't exclusive to cryptocurrency, they're especially problematic because crypto transactions can't be undone.
Famous Fat-Finger Mistakes
The Case of Crypto.com
One of the most shocking incidents occurred in May 2021 when Crypto.com accidentally sent 10.47 million Australian dollars (about $6.86 million) to an Australian couple due to an error in an Excel sheet. The company meant to issue a small refund of 100 AUD! By the time they caught the mistake, the couple had already bought several properties and was in big trouble.
The $23 Million Gas Fee
Another incident involved DeversiFi paying a staggering $23 million fee for a transaction—due to another software error! Luckily, the miner who received that huge fee returned it after taking a smaller reward of 50 ETH.
BlockFi's Bitcoin Bonus Blunder
In May 2021, BlockFi sent out bonuses in Bitcoin instead of stablecoins, leading some users to receive up to 700 BTC! While most people returned the mistaken funds after BlockFi halted further payouts and reversed some transactions, some users sold their accidental windfall.
A Suspicious $90K Ether Transfer
Not all fat-finger errors are genuine accidents. An unknown user once spent around $90K in gas fees for what seemed like a simple $2,200 Ether transfer. Some speculate it was part of an elaborate money laundering scheme.
Understanding Wallet Types
To navigate this tricky landscape better, it's essential first to understand different types of wallets. Hot wallets are connected to the internet and easy for frequent use but more vulnerable; cold wallets store your keys offline and are generally safer if used correctly.
Tips To Avoid Costly Mistakes
Use Whitelisting and Test Transfers
One effective method is whitelisting addresses—only send funds to addresses you've verified before. Another is conducting test transfers with small amounts first before committing larger sums.
Rely on Hardware Wallets
Consider using hardware wallets that display deposit addresses directly on them; this makes it harder for malware on your computer to change the address without your notice.
Automate Where Possible
If you're running a business or doing high-volume trading, consider automating your operational workflows as much as possible; human error is often unavoidable but can be minimized through careful design.
Implement Platform Safeguards
Trading platforms could introduce features like confirmation dialogues for large trades or maximum order size limits to catch potential mistakes before they happen.
Summary: Stay Informed And Vigilant
Fat-finger errors can cost you dearly in cryptocurrencies! By understanding wallet types and employing strategies like address whitelisting or using hardware wallets—you can significantly reduce risks associated with these potentially catastrophic mistakes.
