A fundamental aspect I’d like to share today concerns sending crypto. In this article, I want to share five practical tips for all beginners in crypto transactions, describing the right way to send cryptocurrencies while avoiding basic problems.
1 – Don’t send a token to a coin address, and vice versa
Many users consider Tokens and Coins to be the same thing, but in reality, they are not. They share totally different concepts in the blockchain world, and usually, they don’t support inter-transactions. If you mistakenly transfer a Token to a Coin address, you’ll probably lose your money.
The simplest definition of Coin and Token is:
Coin generally refers to blockchain projects that have already launched their mainnet, while Token is linked to blockchain applications that have not yet released the mainnet and, instead, develop their token model on mature blockchains, such as Ethereum with the ERC-20 standard.
Coin is the native currency issued together with the birth of a blockchain and used as gas or fuel for all economic behaviors on the base blockchain. It’s also called Native Coin.
Token is a credit to be used in conjunction with blockchain applications, which are issued and developed on the base blockchain. Tokens are used in DAPPs or corresponding smart contracts as proof of interests in these applications.
For example, before BinanceChain mainnet was launched, BNB was an ERC20 Token issued on Ethereum, as the gas and benefit credential for Binance users. After BinanceChain was launched and BNB migrated to mainnet, it became the native coin on BinanceChain, playing an important role in the Binance ecosystem.
Understanding that Coin and Token are issued on the same blockchain, which is independent of others, makes you understand that you cannot transfer Coin to a Token address (and vice versa).
If you own cryptocurrencies, it’s essential that you always stay updated on the latest news regarding your token/coin, such as when and how the development team releases their own mainnet, to understand if there could be changes to your assets in the near future. The most direct way is to ask the coin/token team directly about this difference and analyze the white paper and roadmap.
2 – Always double-check the receiving address, even if you copy and paste it
This is a fundamental step for all transactions. If money is sent by mistake to a wrong address, no one can recover the money. Even if you copy and paste the address, don’t forget to verify and check it.
3 – Always use new receiving and sending addresses to increase your privacy
When it comes to Bitcoin, or other crypto, total anonymity is a bit of a myth. To obtain goods or services, you must reveal who you are, so Bitcoin addresses cannot be completely hidden. That’s why I would advise you to use a different Bitcoin address each time and be careful not to let anyone know your addresses.
To keep your privacy safe, every time you receive a payment, use a new Bitcoin address. If you want, you can also have different wallets for different purposes. This way, each transaction is isolated, separated from the others, making it impossible to link them together. Therefore, whoever sends you money cannot snoop into your other Bitcoin addresses and see your transactions.
4 – Be careful when scanning an unknown QR code
When we enter a receiving address, we can copy/paste the address, or simply scan the QR code to enter the address. Scanning a QR code to get a receiving address has become a common and increasingly used interface to save time. However, some users might directly transfer money after scanning the QR code, without double-checking the correctness of the address.
Since the QR code could be generated through any public online tool, it’s possible that these tools could be hacked, thus changing the address to theirs or inserting malicious code (man-in-the-middle attack). Both can cause asset loss.
If you’re scanning a QR code to get the receiving address, don’t forget to verify and check the address before sending any cryptocurrency.
5 – Send a small amount first, before sending a larger one
This is a practical tip mainly adopted in the financial sector, but it might not be known by many users. Since a single error (such as confusing Token and Coin, not setting enough gas, etc.) could cause the transaction to fail, it’s always better to send a small amount before sending a larger one, to make sure you’re not sending to a malicious or invalid address.
Anyway, for the second time you send crypto, don’t forget to check and verify all the transfer details.
