Bitcoin Cash Locked in SegWit Addresses: A Recovery Workaround Discovered

A miner has found a way to free up Bitcoin Cash sent wrongly to similar-looking SegWit addresses but will perform the service for a fee.

In the past few weeks, losing Bitcoin Cash by sending to SegWit addresses by mistake has become more common- to the tune of locking in $600,000 worth of funds. But this time, a miner managed to find a workaround and move the funds, presumably with the idea of restoring them to the owners- for a fee.

And the option to recover BCH lost in this manner is open for only a short time- the deadline for sending a message to an email provided on Reddit is December 5. The Reddit user, u/bchsegwitrecover, will be open to contacts for similar cases, and presumably to distribute the salvaged funds from a well-publicized wallet address.

At the moment, Bitcoin Cash developers are seeking ways to alter the addresses and avoid confusion. For now, recovering Bitcoin Cash is again a decentralized effort, therefore coming with a bounty for skilled miners who take up the task.

An older known salvage transaction for 100 BCH was performed by mining pool a few days ago. But recovery is mostly voluntary, and for now u/bchsegwitrecover has made one of the biggest breakthroughs for the most significant sum.

The reason for the mistakes that locked more than 400 BCH is that Bitcoin Cash addresses have a standard that makes them look like SegWit-enabled Bitcoin addresses. New addresses for Bitcoin Cash are not expected until next year, proposed by Bitcoin Cash's lead developer and "benevolent dictator" Amaury Sechet.

But the most recent move and bounty-taking is seen as ambiguous by the community. Recently, a call to benevolent miners was made with the aim of providing support for mistaken transactions. But so far, few miners have shown readiness to provide support until the new address format is unrolled.

In theory, miners could take the mistakenly spent funds for themselves, and some believe there are many more similar transactions and funds available that are still unannounced.