Wrong-address transaction errors occur as a result of cryptocurrency addresses being represented by a long string of letters and numbers. If users don’t check the details several times while typing in their address, there is a chance that all of a users tokens will be sent to the wrong recipient.
BlockCAT conducted a survey that quizzed cryptocurrency users on the level of anxiety they experience when sending crypto transactions. Results show that 94% of respondents worry about making a mistake when sending cryptocurrencies and 11% have actually sent crypto to the wrong address.
Unfortunately, wrong-address transaction errors are becoming more common as newcomers attempt to make cryptocurrency transactions across different networks. And exchanges are profiting from user transaction errors by charging large recovery fees, or not even offering the option to recover tokens sent to the wrong addresses.
For example, CoinExchange.io charges 10% of the transaction amount for Ether (ETH) sent to an ERC-20 token address. There is a 0.5 ETH recovery fee for ERC-20 tokens sent to the wrong address. Depending on the price of Ether, the recovery fee for tokens sent to the wrong address can be quite costly. Other exchanges, such as HitBTC, have a policy that erroneously sent transactions will not be refunded at all.
The Solution: ‘A Human Readable Value Address’
In order to solve the problem of wrong address transaction errors, IOV has created a blockchain name service (BNS) application, which is a DNS-like system for blockchains. According to an IOV blog post, this is the first global decentralized blockchain address registry. One of the main benefits of BNS is that it allows a user to take their public key and register a human readable value address.
“When you think of a blockchain address now, you think of a line filled with numbers and letters,” Dell said. “While that’s useful, it’s really hard for non-technical people to understand what that means. In order to encourage mass adoption of cryptocurrencies, we are looking to create a blockchain name service where people can register their names on a blockchain.”
Simply put, traditional blockchain addresses look something like this: 17Rts7fvY9Co2kja4DirzAbFX57j858yfx.
These address are hard to remember and prone to errors when making transactions.
Alternatively, a human readable address would resemble something like this: isabella*iov.value, which is much easier to remember and share.