The use of cryptocurrencies is developing and expanding steadily. According to Statista, there will be 60 million clients of blockchain wallets by the end of February 2021. But according to a statistic, over 1.1 million payments were made using Ethereum in just the same month as over 330,000 payments using Bitcoin.
Cryptocurrency development nowadays
Today’s development of cryptocurrencies has led to the development of many instruments aimed at imitating transactions. Users have access to a wide range of tools for payments thanks to the availability of many exchanges.
All of this has resulted in the definition of terminology like “transaction memo,” “tag,” and “ID,” as well as the accompanying guidelines for creating memos and their justifications. If you are likely to invest in crypto and get to know everything about crypto, you will need to find the cheapest way to invest in bitcoin. This can be an amazing start for you.
In this article, you will find memo crypto, memo in crypto transfer, and something about the memo crypto wonderland.
What is memo crypto?
Essentially, a crypto memo is a unique section in the trade information box that may be entered with a distinct line of receiver data. A memo is a description, as its name suggests.
This field actually serves so that users performing the transaction can add specific descriptions or information to their transaction.
Transaction descriptions may vary. From banal things like “Gift” to the purpose of the transaction like “Interest for the last month”.
In order to comply with tax inspections that may target some transactions if they are not correctly labeled, it is normal practice for most transmitters to attach a memo even if the transaction is not of a business-related nature. When you need to send money to a particular user from a shared account (wallet address), you use a memo. For instance, Binance offers shared wallets for a few different cryptocurrencies, and your Memo serves as an exclusive account ID.
So, now that we understand the term “memo” or “destination tag,” and what is memo in crypto transfer, we will talk about why do memos exist in crypto.
Why do memos exist in crypto?
A cryptocurrency must have a certain minimum initial balance to create a wallet before it can have a memo. Exchanges with thousands of users currently don’t want to spend a few more euros for every profile created, so they use a few common wallets between customers and then assign every account a distinct memo so that they can divide cash correctly.
If you want to send certain funds to the crypto database, they will first give you a memo, or destination tag.
You have to remember that it is crucial to write that memo in your transaction. If you do not enter the memo in your transaction, the exchange will not know that it is your funds and the funds are deposited directly in the common wallet. When this happens, there is a possibility that you will never be able to get your money back.
As we mentioned earlier, not all cryptocurrencies have a memo. So, it’s important to know which currencies have, and which types of memo. In further text, find out the answers to these two questions.
Cryptocurrency that has a memo.
Well, not all cryptocurrencies have memos. To explain that, we will take Bitcoin as an example. Bitcoin doesn’t have a minimum balance on the wallet, so that means Bitcoin can’t have a memo. This is also the situation with Litecoin and Ethereum.
Don’t be disappointed because there are a lot of other cryptocurrencies that have options for memos. Here you can find a list of that cryptocurrencies:
- Binance coin
- Stellar Lumens
It’s important for you to mention that XRP does not have a standard memo. This cryptocurrency memo is called ” Tag with XRP.” Don’t be confused because this is exactly the same but with different names.
Since cryptocurrency memos don’t have to be just letters, we split them into two different types or categories. There are memos with letters and numbers, and we call the “alpha-numeric memos.” Memos that only contain numbers are called “Numeric Memos.”
It’s important to always double-check every memo because it often happens that people mix the number 1 with the letter I.
We prepare a list of cryptocurrencies with their category of a memo:
- Binance coin – Numeric
- XRP – Numeric
- Stellar Lumens – Alpha-numeric
- EOS – Numeric
How you can use memos?
Now, when we know what is memo crypto, we can move on to the part where we need to explain how to use memos.
The first step when you receive a memo is to be sure to include that particular string of letters and numbers in the transaction you want to perform. In the further text, you will find out how to use memos step-by-step.
You need to be aware that you will be using the memo in specific situations. The main usage A Step-by-step to make a transfer to a crypto exchange, in order to trade your cryptocurrencies for other crypto or other fiat currencies.
A Step-by-step guide:
- First, you will need to log in to the exchange where you want to send your crypto.
- Next, you will need to select the wallet section and find the information about deposit of crypto you want.
- Then, you will see the MEMO next to the address for the desired cryptocurrency.
- Now, you need to open your crypto wallet. After you have opened the wallet from which you send funds, copy the deposit address.
- You can now paste the receiving address that you have got from the exchange.
- Return to the exchange again, take the memo, and then put it in the appropriate Memo area of the other wallet you are transmitting from.
In order to have the best possible success in the crypto world, you will need to do a lot of research. A great way to get familiar with terms in this world is to connect with people who are already in crypto, but you can also go and check out the largest bitcoin conference in history. In this way, you will be able to understand how the crypto world is functioning.
We hope this article helped you understand memo crypto and how to use memos in crypto.
Meta description: Have you ever asked yourself what is memo crypto? In this article, you will find out answers to this question and many more about memo crypto.