Cryptocurrency users are in full control of their funds, which also means they bear the full responsibility for sending money to the correct address. Sending funds to a wrong address can have very dire consequences. Thankfully, it is virtually impossible to send Bitcoin to a wrong block chain. However, should the transfer be accepted because it is recognized as a valid address, things can get out of hand very quickly.
CROSS-BLOCKCHAIN BITCOIN TRANSACTIONS ARE INCREDIBLY RARE
One of the main reasons why sending Bitcoin to a wrong blockchain is practically impossible is due to all wallet clients implementing a checksum to validate destination addresses.
For example, if you were to paste a Litecoin address as the recipient of a Bitcoin transaction, nearly every wallet will say it is an invalid address. The chances of seeing such a transaction go through are slim to none, which is a good thing.
Some people may wonder how wallets are capable of recognizing the address as being a wrong one. First of all, Bitcoin and Litecoin addresses use a very different address prefix. Most Bitcoin wallet addresses start with a “1”, whereas Litecoin addresses start with an “L”.
Multisignature wallet addresses are the big exception to this rule, as Bitcoin and Litecoin multisig wallets often start with a “3”. In this particular case, an accidental cross-blockchain transfer could become a real possibility.
Should the Bitcoin blockchain recognize the Litecoin address as a valid one, things turn rather problematic. Unless you know the person who owns the address, getting money back will be virtually impossible. Once the transaction is confirmed by the network, there is no going back.
However, if there are no confirmations, one could attempt to resend the transfer to a different address by using the child-pays-for-parent method we documented here.
If both of these methods fail, the sender will have a very big problem. Sending the money to a valid address but the wrong kind will effectively result in money being lost for good. An incorrect but valid address is a very big problem in the world of cryptocurrency, as addresses can get mixed up if attention wanes for just a second.
The chances of such a transaction occurring is very small, as mentioned before, but users should exert caution every time they broadcast a transaction.
Novice users often think sending funds to a wrong, but a valid address will ultimately result is getting their money back. That is not the case, as Bitcoin does not work like traditional banks in this regard. In most cases, that is an attractive aspect, but it can be a negative experience for novice cryptocurrency users.
It is equally possible to send money to a non-existent address, although the wallet should flag it as an error and not broadcast the transaction in the first place.
In the end, it is of the utmost importance to properly select the address you ways to send funds to. Chances of it going to a wrong blockchain are very slim, but the risk is always present.
Never send Bitcoin or other cryptocurrency transactions to an address in a hurry. Double-check the recipient address to make sure funds are going where they are supposed to. Failing to do so could have some very serious consequences, to say the least.