Oftentimes, when we decide to withdraw or deposit crypto in our account, we are asked for a field termed as MEMO. If you are new to this, you might not be sure what exactly is MEMO and what’s the use of this field while transferring cryptocurrency from one wallet to another.
Today, I will explain in short what is termed as MEMO and why mentioning it while transferring funds is important.
Why is Memo/Destination Tag required?
You can say it as an additional identifier while transferring funds from a decentralized wallet to an exchange that’s centralized.
- For Centralised Exchanges like WazirX, they use one address for all traders of cryptocurrencies on the platform. This means that the Memo/Destination Tag becomes a necessity in this case.
- Memo/Destination tag is used to determine what individual customer a given transaction should get credited to. If you place a wrong memo while receiving funds to a centralised exchange, it will get credited to someone else, or the funds will be locked out so it’s crucial to enter it correctly.
Example: The address you send one of the tokens can be relatable to a Classroom, where each individual student has a unique roll number. If you don’t know the exact roll number, you won’t be able to find the exact student you came looking for.
When is a Tag/Memo not required?
The exception to the requirement of including a Memo/Destination tag is when you are sending funds to a privately owned cryptocurrency storage wallet or device.
A private wallet denotes one which only a single individual has full control of with both the public key and private key or a seed phrase. It can be a decentralized wallet like Metamask or Trust Wallet which are owned by a single individual. Remember that your WazirX Wallet doesn’t work this method as it’s a centralized exchange and you have to enter a specific memo while receiving funds in your WazirX Account.
For Trust Wallet, Metamask, Hardware Wallets, etc you may not require a destination tag/memo and you can enter any random number like 12345 in place of it.
If you are uncertain of whether you need a destination tag/memo for your case, always be sure to double-check with the support team before making a transaction. This will make sure your funds are safe and reach the destination properly.
I hope by this short and simple article, I was able to clear your doubts on this topic. If you have more questions, drop them in the comments and I will get back to them ASAP!
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