New Ethereum token standards for reversible transactions

 

You can’t cancel or reverse your cryptocurrency transaction once confirmed on the Ethereum blockchain. Why? Because Ethereum was designed to be immutable in the first place. 

What’s immutability?

Immutability means you can’t alter the information in a dataset. In the context of blockchain, it prevents a central authority, like a government or a company, from manipulating, replacing, or censoring the data. It is an approach to ensure decentralized operations. 

It also enables data integrity, a requirement for building efficient data storage platforms. Since data can’t be modified, new data is simply added to the existing ones, making the whole process faster than mutable databases. Furthermore, transaction histories are open, verifiable, and auditable because data is stored on the blockchain permanently. 

The downside is that it’s impossible to undo a transaction; for example, when you send your crypto to the wrong wallet address due to a typo or because you get trapped in a scam. In other words, your financial loss is also permanent. 

Are reversible transactions possible?

There’s no universal method yet. However, there’ve been proposals using different approaches. 

One approach is making initial coin offerings (ICOs) reversible, as with rICO, which was developed by Fabian Vogelsteller. rICO provides coin investors the option to reserve the coins for a period of time. If, during this time, buyers change their minds, they can return the reserved tokens to the smart contract. Reversible ICO is a powerful protection against scams that occur during project launches. However, it doesn’t work for reversing individual transactions.