The new address format seems to be gearing up for even bigger plans.
Because the legacy chain (BTC) and Bitcoin Cash (BCH) share a common address format to date, it has caused confusion and resulted in some users losing their money after sending BTC to a BCH address, and vice versa. In an effort to put an end to this problem, Bitcoin ABC’s lead developer Amaury Séchet is proposing a new address format for BCH, one that will make it incompatible with the BTC chain.
According to Séchet, the new address format, called cashaddr, not only helps end the confusion. It also prepares the Bitcoin Cash system for further upgrades in the future, including multiparty smart contracts.
“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.”
In addition, the upgrade incorporates some advanced improvements to the original address format. He says that the new address is more compatible with QR code encoding, and would be faster to decode and encode, which would come in handy when processing large volumes of addresses. A very strong checksum also safeguards from more errors.
The upgrade can be implemented easily and does not need a hard fork. Séchet is targeting a January 14 deployment—which is perfect as it avoids the Christmas holiday season, when transactions may be at its peak, while also being ahead of another holiday season, the Chinese new year which falls in February.
Séchet urges wallets and exchanges to deploy the upgrade shortly in order to “stop the fragmentation of the ecosystem,” citing a temporary fix employed by Bitpay that uses an incompatible address format. While it was understandable that they had to find a temporary solution to keep their users from losing money over the confusion between BTC and BCH addresses, it will no longer be necessary once cashaddr is implemented.