KEY POINTS

  • Startup Kirobo created a system to undo cryptocurrency transactions
  • It provides a transaction code that the recipient must enter to complete the transaction
  • A 2019 study revealed 65% have sent cryptocurrencies to a wrong address, sent the wrong amount or became phishing victims

Israel-based blockchain startup Kirobo has invented a way to undo "irreversible" cryptocurrency transactions. 

Called “Retrievable Transfer,” the system allows a sender to cancel a transaction that was sent to the wrong address. Kirobo provides both the sender and receiver with a transaction code that the recipient must enter to complete the transaction. The sender can retrieve the cryptocurrency if the recipient doesn't enter the correct code. 

Kirobo is supported by the Israel Innovation Authority and is audited by the Scorpiones Group, a cyber intelligence firm, Cointelegraph reports. With the goal of making blockchain transactions as easy and secure as online banking, Kirobo said it does not hold any private key nor does it have access to user funds, which can be retrieved even when the startup’s servers are down.

Kirobo said its technology can be useful to crypto custodians, crypto exchanges, and blockchain wallet companies that want to add reversible transactions as one of their features.

Blockchains, especially the Bitcoin blockchain, have irreversible transactions. Once a Bitcoin address sends out BTC, the transaction will be confirmed on the blockchain and sent to the recipient’s address. Irreversible transactions add finality and prevent cases such as credit card chargeback fraud wherein a buyer purposely cancels a transaction after the purchase has already been made.

On the other hand, if someone sends Bitcoin to the wrong address, there will be no way to get it back and this will be considered lost crypto. Situations wherein a user send Bitcoins to a wrong address because of a computer malware deliberately changing the recipient’s address can also be mitigated by this system.

In a 2019 study, 65% of the respondents said they have sent cryptocurrencies to a wrong address, sent an incorrect amount of crypto, or became victims of phishing or man-in-the-middle crypto attacks. Recently, a man lost 12 BTC after a phishing scam made him enter his private keyphrases to a phishing extension.