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I transferred BCH to an Electrum wallet address and haven't ever received it because Electrum uses only BTC. As I have been trying to recover it, I looked up the transaction on explorer.bitcoin.com and it was input but has also been output 5 times and the balance shows 0. So it would appear that someone has access. How is that possible? Shouldn't it be secure? Do I have any sort of recourse?

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    Hello, welcome to bitcoin.SE! It's hard to help without more info. Perhaps your computer or a wallet backup is compromised. Can you post the receiving address you sent the coins to? – chytrik Sep 23 '18 at 10:12
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    What exactly is the address you sent the coins to????? If it was a segwit then anyone have access to it. – Tjay Sep 23 '18 at 11:40
  • Is your electrum wallet setup to use segwit? – lastcanal Sep 23 '18 at 18:58
  • I don't know if it is a segwit. I have never heard that term and I did not set it up that way, it is just a standard electrum wallet. All I know is that on September 5th I generated an address from electrum then went to bitcoinpurser.com and sent the bch. Then I found out that electrum only accepts btc. So I went about trying to retrieve my bch by creating a electroncash wallet and linking the two. That was on the 19th Meanwile the ledger shows both an input and several outputs and the balance is 0. – t1zzee Sep 24 '18 at 0:03
  • And I can only find it in the ledger from the crypto address on bitcoinpurser.com not from the electrum address. – t1zzee Sep 24 '18 at 0:05
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This address you posted 19EsSXxaTParaHqQ7V8o9A9xbZ47fApe7f shows no transaction, so you probably sent to somewhere else. What was the address the coins was sent from, let us help you track it down.

  • crypyo address:qqn28cuav4tr8mwtkqgzmgn0njtetyh83qn52lsvt6 – t1zzee Sep 26 '18 at 13:41
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So it would appear that someone has access. How is that possible?

Excellent question

Segwit addresses

Segwit increases the capacity of the Bitcoin (BTC) network and enables the lightning network. Segwit addresses start with 3 or bc1.

On 21 November 2017 Kai Sedgwick reported on Bitcoin.com

Someone Just Helped Themselves to $600k of Bitcoin Cash from Segwit Addresses

As anyone with a passing knowledge of bitcoin cash will tell you, BCH and segwit don’t mix. Send BCH to a segwit address and you’re gonna have a bad time. Unless you happen to be a miner with the hashpower and technical prowess to unscramble the mess, in which case you’re gonna have a very profitable time. 493 BCH worth $610k has just been retrieved in that manner by one enterprising individual.

A segwit address is just a particular kind of Bitcoin address being introduced as part of some Bitcoin improvements.

Non-segwit addresses

For a third-party to spend bitcoin-cash (BCH) sent to a non-segwit bitcoin (BTC) address, they would need access to the private-key from which that address was derived.

This might happen through the use of viruses, Trojans, fishing or social engineering etc.


Receiving address I have is 19EsSXxaTParaHqQ7V8o9A9xbZ47fApe7f

(from comment to Problems recovering BCH accidentally sent to BTC address)

Blockchain explorer websites show no transactions for that address

Example for BTC blockchain:

Summary 
  Address   19EsSXxaTParaHqQ7V8o9A9xbZ47fApe7f 
  Hash 160  5a6084e7e05b44c3805b8372462e876447b28d43 
Transactions 
  No. Transactions  0    
  Total Received    0 BTC    
  Final Balance     0 BTC

Example for BCH blockchain

Address
     bitcoincash:qpdxpp88upd5fsuqtwphy33wsajy0v5dgvkmjdckhh 

Balance: 0.00000000 bch
Total Received: 0.00000000 bch

Example 2 for BCH blockchain

Address 0 BCH
Address bitcoincash:qpdxpp88upd5fsuqtwphy33wsajy0v5dgvkmjdckhh
Summary confirmed
Total Received  0 BCH
Total Sent  0 BCH
Final Balance   0 BCH
No. Transactions    0

Security

Shouldn't it be secure?

Only if you send Bitcoins to bitcoin addresses and bitcoin-cash to bitcoin-cash addresses.

Groups of people developing different cryptocurrencies don't always cooperate with other groups to prevent this kind of consequence. The split between Bitcoin and Bitcoin cash was a little acrimonious.


Recourse

Do I have any sort of recourse?

No.

Cryptocurrencies are essentially designed as peer-to-peer currencies with no regulatory oversight and with no third parties enabled to intervene in disputes.

You dropped some coins on the floor and someone picked them up.

You could ask the person who found your BCH if they will give them back to you for a 30% bounty. It may be hard or impossible to work out who has your BCH and how to contact them. You will be relying on the kindness of a stranger.

You could report the matter to your local police.


Third Party Oversight

This is me transferring my coins to my account but because they aren't dollar bills the bank teller steals them!

There are no bank-tellers in Bitcoin.

You accidentally sent your bitcoins to the wrong destination. Other people who are unscrupulous can often take advantage of any mistakes you make.


Prevention

Something needs to be done about this

  1. You need to be more careful.
  2. If you ask them, wallet developers might consider changes to their wallet software that might make this kind of error less likely.
  3. I believe the Bitcoin-cash (BCH) developers plan a change in address formats to avoid them looking like Bitcoin's (BTC) Segwit addresses.

Risk.

There is a serious flaw in the cryptocurrency system if it simply allows thieves to pray on people who are new to it without any recourse

Bitcoin transactions are by design irreversible. Bitcoin is a very risky investment. Anyone getting involved needs to take the time to understand the risks before getting involved.

Thieves will always prey on those who make careless mistakes. The nature of cryptocurrencies is that they are conceptually unlike the currencies and financial systems that people were previously used to, this makes cryptocurrencies relatively dangerous for the unprepared. For example, the use of the term "wallet" is misleading because cryptocurrency wallets do not really contain any money. Thinking that Bitcoins exist in the blockchain or are entities that are stored somewhere electronically is an error. This makes it easy for the unprepared to make mistakes and lose money.

Caveat Emptor.


Other useful references

  • How can I tell if it was a segwith address and how can they call it an improvement? You are telling me that somebody just went ahead and stole $500 from me and there is nothing to be done about it? – t1zzee Sep 24 '18 at 11:05
  • @t1zzee, segwit addresses begin with either a 3 or with bc1. Segwit increases the capacity of the network and enables the lightning network. But yes, if you send your money to the wrong place, it goes to the wrong place. Welcome to the world of cryptocurrency – RedGrittyBrick Sep 24 '18 at 12:09
  • The receiving address does not start with a 3 or a bc1. It does start with a 1. – t1zzee Sep 26 '18 at 0:46
  • So if it is not a segwit address how could they get access? – t1zzee Sep 26 '18 at 0:47
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    This answer is now incorrect again, Bcash turned all of Bitcoin's anti-malleability IsStandard rules into consensus rules and inadvertently made all segwit style scriptpubkeys unspendable by consensus. – G. Maxwell Jan 10 at 0:34

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