On August 1, a renegade group of cryptocurrency enthusiasts decided to split off from Bitcoin and create a near-identical clone called Bitcoin Cash. The two digital currencies are similar—Bitcoin Cash addresses even look like Bitcoin addresses—but are incompatible.
Now, some users are reporting that they've accidentally sent Bitcoin Cash funds to Bitcoin addresses, and they're likely lost for good. Damn.
On Sunday, a Reddit user called "btctroubadour" raised the alarm on the trend in a post that listed a handful of instances where people had complained on Reddit that they'd screwed up and sent Bitcoin Cash funds to a Bitcoin address, and desperately asked how to get it back. Most of the posts are from people claiming to have sent their funds to a Trezor wallet. Trezor is a popular manufacturer of hardware Bitcoin wallets, and very clearly warns users several times on its site not to send Bitcoin Cash funds to a Bitcoin address.
"Yep, I have done the thing it says not to do in the documentation," Reddit user "styz0r" wrote in the Trezor subreddit a week ago. "I have sent my bitcoin cash from my coinspot exchange to my hardware bitcoin wallet address. Is their [sic] a way to recover it?"
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Why is this happening? Bitcoin proper supports a recent code change called Segregated Witness, but Bitcoin Cash does not. This difference makes them incompatible. However, Bitcoin Cash addresses follow the same format as Bitcoin addresses and look alike. This coincidence means that if Bitcoin Cash users aren't careful, they can send their money to a Segregated Witness-supporting Bitcoin address.
"People WILL make mistakes," Pavol Rusnák, Chief Technology officer of SatoshiLabs, the company behind Trezor wallets, wrote on Reddit. "Too bad, this could have been easily prevented." Indeed, Rusnák raised this concern with Bitcoin Cash developers on GitHub in July.
"This affects all Bitcoin Cash users, not only Trezor users," Rusnák wrote me in an email. "[The] decision not to change the address format is quite irresponsible from Bitcoin Cash developers, because a lot of people have big problems distinguishing these two projects, [and] moreso their addresses."
According to Rusnák, the only way for people to get their Bitcoin Cash funds back is to somehow find a miner who would be willing to go through the trouble of processing these non-standard transactions.
When Rusnák raised his concerns in July, Bitcoin Cash developer Amaury Séchet responded, "I have a plan to change the address format." If the recent spate of unfortunate screw-ups is any indication, this change can't come soon enough.
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