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How to modify or cancel transactions on Ethereum blockchain

How to modify or cancel transactions on Ethereum blockchain

How to modify or cancel transactions on Ethereum blockchain
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By CNBCTV18.com Mar 17, 2022 2:49 PM IST (Updated)

Considering cancelling or modifying your Ethereum transaction? Here's all the important information you need to know to modify or recall transactions on the Ethereum network.

Ethereum is one of the most popular blockchains for decentralised applications (dApps). There are currently thousands of different decentralized finance (DeFi) and NFT projects running on the Ethereum blockchain. Many of these dApps have hundreds of thousands of active users who carry out numerous transactions every day.

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This user activity can spell trouble for a blockchain like Ethereum that can only process 15-25 transactions per second. When there is a high volume of transactions, the system can get clogged, leaving you in limbo that could last for hours, days, or even weeks. If your circumstances change while your transaction is still stuck, you could consider cancelling or modifying your transaction.
Not sure how to do this? Tag along as we cover all the important information you need to know to modify or recall transactions on the Ethereum network. But before we move forward, it’s important to understand a couple of things:
The Ethereum blockchain:
The Ethereum blockchain uses the Proof of Work (PoW) consensus mechanism to verify transactions and add them to the block. In the PoW consensus mechanism, a network of miners scattered across the globe dedicates significant computing power to complete the transaction verification process.
They communicate with each other constantly to arrive at a consensus regarding the authenticity of transactions. After that, they bundle the verified transactions into a block and add them to the blockchain. In exchange, the network rewards miners with ETH (Ethereum’s native token) for every block added.
The proof of work consensus mechanism requires vast amounts of computing power. Therefore, not all transactions on the network can be processed at the same time. There are just not enough nodes to work through that many transactions, and even if there were, it would result in exceedingly high amounts of power consumption. This is one of the main reasons why the Ethereum network has a relatively slow transaction speed.
Understanding Ethereum Transactions:
Now that we’ve understood how transactions are verified and added to the blockchain let’s look at the transactions themselves. Ethereum allows two kinds of transactions:
  1. Regular – a simple transfer of funds from one account to another
  2. Contract Deployment – transactions without a receiver
  3. A regular transaction requires the sender to pay gas fees - the amount one pays to get the transaction validated. Since the validation process involves miners, the fee must be paid. The gas fees also prevent miscreants from clogging the network with worthless or spam transactions.
    Users can also attach priority fees over and above the standard gas fee – this is like an incentive for miners to process a transaction faster. As mentioned earlier, miners have an overload of transactions to process, and they usually pick up transactions that have higher priority fees attached to them.
    Ethereum Transaction Lifecycle:
    An Ethereum transaction goes through the following stages in its lifecycle:
    1. Unknown: Any transaction that the network has not processed falls in this stage.
    2. Pending: Ethereum transactions that enter the blockchain network are first put in a “mempool.” It is called so because it is a pool of unprocessed transactions that lie there until they’re verified by the miners and added to the blockchain. Transactions with high gas fees make their way through seamlessly as they are profitable for the miners. The others lie there until they’re picked up for scrutiny.
    3. In-block: Once miners successfully vet a transaction, its data is bundled into a block for addition to the blockchain. At this time, it is said to be in the in-block stage. If two blocks get created simultaneously, both cannot be added in parallel, as this would create a fork in the chain. In such cases, the transactions in those blocks go back to the ‘pending’ stage.
    4. Reversed: transactions can transition from the pending stage to the ‘reversed’ stage only if the following two criteria are met:
      • If the same nonce (explained below) appears in two transactions from the same sender, it goes to the in-block state.
      • Another transaction by the same user enters the pending state with the same nonce, but with a higher gas fee.
      • Nonce:
        One last thing you should know about before we talk about reversing/modifying a transaction is the nonce. A nonce is the number of the transaction initiated from the sender’s address. For instance, if the nonce of your transaction is 14, your upcoming transaction will be the 15th transaction that you have initiated.
        Here’s how you can figure out the nonce of your transaction:
        • Visit a blockchain explorer like - https://etherscan.io/
        • Paste your transaction ID (also called hash)
        • How do you modify/cancel the Ethereum transaction?
          Users can cancel their transactions only if it is still idling away in the network queue. Users need to use a block explorer to know what stage it is in (refer to Nonce). If the transaction is still pending, you will be allowed to cancel the transaction.
          There are two ways to cancel a transaction:
          1. In-application – log out of your crypto wallet, restart your browser, and log back into your wallet.
          2. Custom nonce:
            • Record the nonce of the pending transaction and note it down
            • Initiate a 0 ETH transaction to yourself with the same nonce and higher gas fees (10% higher is good)
            • If you have multiple pending transactions, use the nonce of the earliest pending transaction. This process works well.
              If you wish to modify the previous transaction, you must first cancel it using one of the above two methods and then initiate a new transaction.
              Users must remember that a processed transaction cannot be reversed on any blockchain. They are designed that way to maintain high levels of security in the absence of central oversight.
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