Explanation about the recovering the BCC transfers to BTC addresses

1 year ago

Increasingly you are reporting problems related to BCC funds incorrectly sent to our BTC addresses. Due to this, we publish the most accurate explanation and our stand on this issue.

Many people accuse us of bad faith in recovering wrongly sent coins. There are plenty of discussions on the Internet that BitBay is pocketing these funds and punishing users for their mistakes. However, there are couple of problems that you may not be aware of.

Further clarification will be made of three factors:

  • In August this year, in Bitcoin the SegWit mechanism was activated. Since then, the network has been handling a new format of transactions and a new (technically) address format.
  • The creation of Bitcoin Cash took place before the activation of SegWit and this mechanism in BCC does not occur.
  • BitBay is going with the spirit of technological change and in some way gives opinion in the case - since the introduction of version 3.0, is sharing only SegWit addresses fot BTC deposits. In the BTC and BCC payment tabs we have added a clear, distinctive information about which currency the address refers to.

The problem that occurs with the implementation of SegWit in only one of these currencies is based on the lack of proper handling of some of the new network elements, including addresses.

SegWit addresses (for technical users - specifically address scripts) are not properly recognized by the BCC network, and therefore they are treated as unclear addresses of type ANYONE_CAN_SPEND. This means that a transaction from this address can be commissioned by anyone without knowledge of any key. This situation can be compared to leaving a pile of banknotes in a public place. Defaultly, this type of transaction will be ignored by the miners as a unclear. Sending the transaction information to the network gives a clear message that funds are on the address and anyone can take them.

The situation got so complicated that it was our mission to find trusted miners as quickly as possible so that they could be entrusted with the task of confirming such transactions (and, of course, pay well for this service) and at the same time do it fast enough to make it before other people (for example miners themselves) will realize that they can take these funds. Due to the costs we suffered in relation with the recovery of the transaction, we were able to perform this operation only for larger transfers, which also did not result from our bad will.

We have so far holded back from clear information about the reason for delays in recovering misappropriated funds because we did not want to pay attention to vulnerability, increasing the chance of correct confirmation of recovery transactions.

We have managed to make a lot of returns this way, but unfortunately we also see network-based transactions that use this vulnerability, which means that a large part of the funds, despite our will and attempts, we will not be able to recover.

We will implemate additional warnings informing of which of the addresses the user is copying. Updates will be implemented soon.

Please be careful while copying addresses and make sure that money is transferred to the correct address.

Digital currencies are not managed by a single decision-making institution which could undo operations if necessary. Each user is individually responsible for his own money and should remain extreme caution. BitBay always tries to help solve user mistakes, but it is not always possible because of the rules in the network.