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What If You Could ‘Undo’ Your Bitcoin Transactions

August 3, 2020


What If You Could ‘Undo’ Your Bitcoin Transactions

It should be clear by now that Bitcoin transactions are irreversible and forever stored on the respective network that supports the consensus mechanism underlying a distributed ledger. Right?

In a 2019 publication entitled “Blockchain Usability Report“, FIO Foundation suggested that near 10% of responders to a relevant survey revealed they had at some time initiated a transaction leading to a wrong, as in undesired, Bitcoin wallet. 

What if I told you it is now possible to “Undo” your Bitcoin (BTC) transactions, essentially tackling human errors in crypto-related operations taking place in the leading blockchain network by market capitalization?

An Israeli startup claims to have developed such a scenario, dubbed “Retrievable Transfer”. In essence, the service shall allow senders to cancel a tx that’s sent to an incorrect Bitcoin address by introducing an extra verification step during the initiation phase of each transaction. 

Kirobo, the company behind the invention says that they achieved that state of tx processing by providing a unique passphrase both to the sender and receiver, with the later obligated to provide the matching code in order to receive the transfer of funds and/or digital assets.  

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“Until the right code has been provided by the recipient, the sender can retrieve the funds at any time. […] Kirobo does not hold the user’s private key and has no access whatsoever to the funds or their destination: the password simply governs whether the transfer is finalized or not,” – a Kirobo spokseperson said.

Kirobo is one of the few blockchain companies audited by a verified blockchain auditor (Scorpiones Group) in a legal fashion, while the startup is also backed by the Israel Innovation Authority, a gov-agency responsible for evaluating and promoting innovative tech ideas that would give Israel an advantage in the fields of computer science, financial settlements technology, cybersecurity, and telecommunications.  

Asaf Naim, the acting CEO of Kirobo says that their goal as a company is to make Bitcoin transactions as easy and secure as online banking with Retrievable Transfer service being only the first product that contributes to enabling such as future.

For the time being, Kirobo’s “Undo” button is only available for Ledger users and it shall be free of charge for transactions that amount up to $1,000 at a tune. 

Although the startup assures its users Kirobo doesn’t keep sensitive data such as passwords, seed phrases etc, something that should come as natural anyway, rather than promoted as a feature if you ask me, the Israeli fintech venture doesn’t provide clarity as to how exactly the system works. 

My imagination tells me that it might be similar to Paxful, or Local Bitcoins, where an escort service makes sure that the receiver is eligible to get the funds, and releases the ‘locked’ funds accordingly, even if we’re not talking about a monetary exchange. (eg. simply sending money to my mother).

Nevertheless, it is an exciting concept, one that I am assured will bring controversy into the crypto space, and one that won’t pass unnoticed by malicious actors who would spam the “Undo” button right after a large purchase or payment, bringing back to light the PayPal scandals era.

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To be completely honest, Kirobo’s “innovative features” stink old fish from miles ahead, especially when analogizing their only clients’ at the moment are gambling services providers, gold-backed crypto brokers, and other shady operators, besides Ledger, the major hard-wallet provider out there. 

Not trying to be minimalistic here, just thinking securing blockchain transactions is one thing, and offering an “Undo” button to a registry system that is supposed to be immutable, is a completely different story.

Let me know your thoughts about Kirobo’s “Retrievable Transfer”. Would you consider applying with such a service to further secure your Bitcoin transactions? Don’t you think a hexademical-address mask such as Ethereum’s ENS (Ethereum Name Service) is a more viable, free, and transparent way to make sure your funds are going to wherever you want them to go? Hit me in the comments section below or let’s hook up on Twitter.