Large Transfers - best practices? | Bitcointalksearch.org

bob123

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Quote from: o_e_l_e_o on May 25, 2021, 06:14:26 AM

Quote from: jseverson on May 25, 2021, 12:27:39 AM

Receiving multiple transactions with one address is fine until you spend with it.

Not really. If I hand out the same receiving address to my employer to pay my salary and a co-worker who owes me $5 for lunch, then my coworker can now see how much I get paid.

According to the context of his post, i assume he was talking about the security aspect in which case it indeed doesn't matter.

Privacy-wise you are right. But the average person with a facebook account doesn't care about privacy at all and therefore probably will use the same address for everything.

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Let's say I want to make a large transfer to an exchange. I am sure to verify the receiver address. However, if the exchange made a mistake somehow, all the bitcoin would be lost forever. So does it make sense to send a small amount first, confirm that they receive it, and then send the rest?

It is not a good idea if you move your fund (assume all of it) with

A single transaction because if you make mistakes with your transaction (wrong address, wrong chain, etc.), you lose your coin. Mistakes can be from you or your trade partner.
It is good to make first small transaction to confirm all details given by your trade partner or friend is correct.
If details are correct, you can use your second transaction to finish that trade
If it is your own fund movements, I advise you to do it in different time. Why?
- It can help you to avoid issues with exchanges. Just in case if exchange is hack (like Hotbit weeks ago)
- To avoid anything bad suddenly occurs on the network
- This tutorial is a bit paranoid obviously
Read this guide How to lose your Bitcoins with CTRL-C CTRL-V. It is very important!

o_e_l_e_o

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Quote from: cryptoaddictchie on May 24, 2021, 08:45:22 PM

You are right, if you had copied a wrong one then that's your fault or any missing figure or letter, and position intetchanged.

Bitcoin addresses have a built in checksum, so if you change a character, drop a character, add a character, swap two characters, etc., then the address will almost certainly be rejected as invalid. The checksum is 32 bits, meaning there is only a 1 in ~4.3 billion chance of a mistake still producing a correct checksum.

Quote from: jseverson on May 25, 2021, 12:27:39 AM

Receiving multiple transactions with one address is fine until you spend with it.

Not really. If I hand out the same receiving address to my employer to pay my salary and a co-worker who owes me $5 for lunch, then my coworker can now see how much I get paid.

Taskford

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Let's say I want to make a large transfer to an exchange. I am sure to verify the receiver address. However, if the exchange made a mistake somehow, all the bitcoin would be lost forever. So does it make sense to send a small amount first, confirm that they receive it, and then send the rest?

Because I have also heard that each address should not be used more than once.

How does an exchange will do a mistake? While if you want to deposit they will give an address where you deposit your balances safely. If you miss to copy that and copy the other address well thats your mistake not their.

But if you are worried about sending some large instruction on exchange better send a small amount and once it credited you can send the other large sum so that you will not be worried on worse things.

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If you are really worried, then instead of tiny amount first then all of the rest, you can also do first tiny then 2 equal sizes (or x number of equal sizes) after each transfer is confirmed. If you don't mind taking a bit longer to do the entire thing and paying up some transaction fees. If something breaks, then you only lost 1/x amount.

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Quote from: jseverson on May 25, 2021, 12:27:39 AM

Receiving multiple transactions with one address is fine until you spend with it.

It is fine, but could and should be avoided when possible.
HD wallets are designed to have multiple addresses and changes the receiving address each time a user requests for one; this is useful for privacy. If a user receives funds to 5 or 6 different addresses, it is impossible to know they are owned by the same person except (or until) they use all those UTXOs in one transactions. So a scenario where you send your address to someone for payment, they will not be able to spy into your balance.

jseverson

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Quote from: ChuckBuck on May 24, 2021, 11:37:49 AM

Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Because I have also heard that each address should not be used more than once.

Where did you hear this from? Personally, I think it's safer to use the same address more than once, since you already know that you can successfully deposit it.

By saying each address shouldn't be used more than once, it actually means if you're spending from an address, it's good practice to empty that address and never use it again. Receiving multiple transactions with one address is fine until you spend with it. This used to be more common advice, but like what other people already said, it's not very relevant if you don't care much about privacy (which you probably don't have if you use centralized exchanges).

One more somewhat minor reason why address reuse can be considered bad practice is that future quantum computers can possibly hack into addresses that have already been spent from because their public key has been exposed. Not very important, but probably worth keeping in mind.

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Let's say I want to make a large transfer to an exchange. I am sure to verify the receiver address. However, if the exchange made a mistake somehow, all the bitcoin would be lost forever. So does it make sense to send a small amount first, confirm that they receive it, and then send the rest?

Can but I'm not sure how often anyone could make a mistake for this. You are right, if you had copied a wrong one then that's your fault or any missing figure or letter, and position intetchanged.

I've read some cases if the deposit didn't process but you correctly do the method then no worry they will refund or fix that ofcourse.

Regarding deposit address, the address haven't change in my case. Not sure though but everyone has constant same deposit address that is fixed when we register I think.

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Let's say I want to make a large transfer to an exchange. I am sure to verify the receiver address. However, if the exchange made a mistake somehow, all the bitcoin would be lost forever. So does it make sense to send a small amount first, confirm that they receive it, and then send the rest?

lol, this is not really necessary, unless you are a very careful person Cheesy

BTC is not like other altcoins, BTC works on a single network and just make sure you send it to the right address, it never goes away. It's not a good idea to do 2 transactions for safety, because it costs too much per transaction, I don't want to spend more Cheesy

Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Because I have also heard that each address should not be used more than once.

Where did you hear this from? Personally, I think it's safer to use the same address more than once, since you already know that you can successfully deposit it.

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Quote from: o_e_l_e_o on May 24, 2021, 04:17:31 AM

Quote from: jackg on May 23, 2021, 10:42:31 PM

If you get an email confirming your pending deposit before you've got a confirmation you may also be able to double spend the original transaction allowing for you to mitigate paying extra fees (as the 2 transactions could be replaced by one).

This introduces additional risk without knowing how the back end of the exchange works. There are plenty of places I have sent bitcoin which give you an address and monitor that address for an incoming transaction. As soon as an incoming transaction is detected, they stop monitoring the address and just wait for one (or three, or six, or whatever) confirmations. If you replace your initial deposit with a new transaction, there is a chance that the new transaction is not detected by their system, and then OP will likely have to spend days or even weeks going through the exchange's support team (which are almost universally awful) to get his coins credited to his account. This would only be safe if you are absolutely certain the exchange only gives you a single deposit address and does not change it.

Similarly, if he sends a small amount prior to sending the larger amount and the exchange does change the deposit address, if both transactions are to the same address he will again be faced with the above scenario.

Although I've seen this behavior at payment processors, I didn't at the centralized exchanges. And at the exchange OP can double check if the address has change before attempting such a risky operation.
On the other hand, I always suggest use of RBF just because the fees can change in widely, and the exchanges wait for confirmation(s) before sending the mail. So the double spend will be no longer possible.

Also I've also seen in the past at least once an exchange suggesting (at least for an altcoin) to first send a small amount. It can be useful if more complicated things have to be set/checked (address and some other details too). But I don't see it useful for Bitcoin, where only the address is necessary. Still OP has to be careful to not mix up Bitcoin with BCash and such. All in all, if OP needs a peace of mind, he can do a small send first time, maybe in a week-end. Otherwise it's not necessary.

And yes, if anything goes wrong, the proper tool is the support and the proof (tx id). I myself faced such a problem, long ago. I've sent the deposit, it was not the first deposit I've sent there, but that one was not credited. I've contacted support and after a while (I don't remember if it was hours or days though) it was handled/fixed/credited.

bob123

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Because I have also heard that each address should not be used more than once.

That's for privacy concerns and does not apply in your specific scenario because 1) you are using a centralized exchange and 2) your goal is to send everything from Address(es) A(..X) to the Exchange Z. Here, it doesn't really matter if you send everything in 1 or in 10 transactions.

However, if you have several UTXO's associated to different addresses and want to keep them somewhat separated from the public, then you'd want to send each UTXO/Address individually to a new address from the Exchange.
If this is not the case, using the same receiving address more than once is just fine.

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Quote from: jackg on May 23, 2021, 10:42:31 PM

If you get an email confirming your pending deposit before you've got a confirmation you may also be able to double spend the original transaction allowing for you to mitigate paying extra fees (as the 2 transactions could be replaced by one).

This introduces additional risk without knowing how the back end of the exchange works. There are plenty of places I have sent bitcoin which give you an address and monitor that address for an incoming transaction. As soon as an incoming transaction is detected, they stop monitoring the address and just wait for one (or three, or six, or whatever) confirmations. If you replace your initial deposit with a new transaction, there is a chance that the new transaction is not detected by their system, and then OP will likely have to spend days or even weeks going through the exchange's support team (which are almost universally awful) to get his coins credited to his account. This would only be safe if you are absolutely certain the exchange only gives you a single deposit address and does not change it.

Similarly, if he sends a small amount prior to sending the larger amount and the exchange does change the deposit address, if both transactions are to the same address he will again be faced with the above scenario.

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Let's say I want to make a large transfer to an exchange. I am sure to verify the receiver address. However, if the exchange made a mistake somehow, all the bitcoin would be lost forever. So does it make sense to send a small amount first, confirm that they receive it, and then send the rest?

Because I have also heard that each address should not be used more than once.

You clearly said that if they make mistake, all the btc will lost forever then its the responsibility of the exchange to pay what you have lost id this is the case and I will suggest if its kinda large amount of money please use reputable exchanges only like Binance, Kucoin, Coinbase only.

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Let's say I want to make a large transfer to an exchange. I am sure to verify the receiver address. However, if the exchange made a mistake somehow, all the bitcoin would be lost forever. So does it make sense to send a small amount first, confirm that they receive it, and then send the rest?

Because I have also heard that each address should not be used more than once.

If you know how, I'd recommend signing all the funds over first, storing the transaction offline and broadcasting a smaller one. If you get an email confirming your pending deposit before you've got a confirmation you may also be able to double spend the original transaction allowing for you to mitigate paying extra fees (as the 2 transactions could be replaced by one).

This assumes you're sending your entire wallet as it'll probably cause extra hassle if you don't (also if you're not confident in how to do it I'd stick with sending the smaller amount first and the larger amount afterwards).

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

However, if the exchange made a mistake somehow, all the bitcoin would be lost forever.

If the exchange makes a mistake then it is their fault and they have to compensate you for the money you have lost. Also sending a small transaction first is not going to solve this because a buggy exchange platform that has the chance of making such a mistake could make that mistake on the second transaction!

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Let's say I want to make a large transfer to an exchange. I am sure to verify the receiver address. However, if the exchange made a mistake somehow, all the bitcoin would be lost forever. So does it make sense to send a small amount first, confirm that they receive it, and then send the rest?

Because I have also heard that each address should not be used more than once.

Sending a small amount first is not a bad idea. It is unlikely that there will be a problem with the address but it will test your ability to send correctly.

When you receive bitcoins you should use an address once. However, the exchange is receiving the bitcoins from you in this case, so it doesn't matter.

On the other hand, I change deposit addresses occasionally. If my deposit address can be associated with me, someone could potentially track the amount that I deposit into the exchange. Changing the deposit address makes that more difficult.

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

However, if the exchange made a mistake somehow, all the bitcoin would be lost forever.

Centralized exchanges are usually straightforward and errors at this stage usually comes from the user who is sending the funds and not the exchange, there are cases of users sending their cryptocurrencies to similar but different chains (such as litecoin to the Bitcoin chain).

Using DEXes ma be a bit more complicated as you're mostly responsible for your actions, but it can easily be navigated.
In both cases sending a small fund first as confirmation is advisable, you can also trade with that to know the fee structure of the exchange to avoid paying huge amounts on your transactions.

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Quote from: ulhaq on May 23, 2021, 10:08:14 PM

So does it make sense to send a small amount first, confirm that they receive it, and then send the rest?

If you're extra paranoid, sure. But exchanges not receiving your deposit are really rare cases(assuming the exchange is actually legitimate), and mostly occurs through obscure altcoins. You're really not likely to have a problem when it comes to Bitcoin.

And if it does happen, contact support. And they'll likely fix it if you show proof through a block explorer that your deposit indeed went through.

Quote from: ulhaq on May 23, 2021, 10:08:14 PM

Because I have also heard that each address should not be used more than once.

This is mostly due to privacy reasons with your own wallets(though it can also apply on the deposit side). As for exchanges, I'm not sure what exchange you're using, but if I remember correctly all the exchanges I personally use don't change deposit addresses. They only change when I request a change.

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Let's say I want to make a large transfer to an exchange. I am sure to verify the receiver address. However, if the exchange made a mistake somehow, all the bitcoin would be lost forever. So does it make sense to send a small amount first, confirm that they receive it, and then send the rest?

Because I have also heard that each address should not be used more than once.

Topic: Large Transfers - best practices? (Read 216 times)