The developers behind Bitcoin ABC, a software implementation which accounts for 81.48% of all nodes running on the Bitcoin Cash network, have released a new update designed to solve an issue whereby users could lose funds when mixing up BTC and BCH addresses.
The problem stems from Bitcoin Cash’s hard fork last year, which resulted in the cryptocurrency inheriting the same address format as Bitcoin. As reported before, the issue enables some users to accidentally send funds in one currency to an address on the other currency’s chain, meaning these users would lose their assets, either temporarily or permanently.
Bitcoin ABC lead developer Amaury Sechet announced last November that he was working on a new address format, called CashAddr, to prevent this issue from happening, describing this as a “pressing need.”
“Using a new format will prevent users from mistakenly sending money on the wrong chain. It also accept payloads up to 512 bits which ensures we can deploy more secure way of doing multiparty smart contract in the future. Finally, it uses a version field ensuring we can encode new features in these addresses in the future without having to use a new format.”
The change is mostly cosmetic. Implementing the new address requires exchanges, merchants and wallet providers to upgrade their software, but does not require a hard fork or for every node to also update to the new version.