Help! My Exchange or Wallet Won't Let Me Send Litecoin to M-addresses
In Litecoin, to avoid confusion with Bitcoin, all 3-addresses have corresponding M-addresses, which is the preferred format. This means that whether you send LTC to the M- version or 3- version of the address, it is the same key accessing the funds.
We use M-addresses to minimise risk of deposit error. If your exchange or wallet does NOT support M-addresses, please convert it and send to the 3-address instead.
To easily convert between the standard 3-prefix P2SH address format to M-prefix, you can use this open source tool provided by the Litecoin Foundation: https://litecoin-project.github.io/p2sh-convert/
The Litecoin transfers system on Crypto Facilities is 100% Segwit based. However, the wallets used are not native Segwit (Bech32), but utilise Pay To Script Hash Pay To Witness Public Key Hash (P2SH-P2WPK) addresses.
Normally, these address types are prefixed with the number "3", like on Bitcoin. Litecoin, as a fork of Bitcoin, by default has the same format. Unfortunately, this can lead to confusion with users who accidentally send Bitcoin to P2SH Litecoin addresses or accidentally send Litecoin to P2SH Bitcoin addresses.
Avoiding User Error
In order to resolve this confusion, the Litecoin community developed a new address format that is prefixed with M, a format that would not be valid on Bitcoin. The underlying private and public key pair are the same, but the hashing algorithm for displaying the public key is altered. This means that 3- and M- addresses are both interchangeable for the purposes of movement of funds on the Litecoin blockchain. This simple change drastically reduces cases of erroneous cross-chain transfers.
To help Litecoin Futures traders avoid loss of funds, we use P2SH-P2WPK deposit addresses with the M prefix. We believe this strikes the right balance of supporting Segwit on the Litecoin network as the community wants, while minimising issues of wallet compatibility that Bech32 address format has.
However, some users may still be using wallet software or exchanges which do NOT support sending LTC to M-prefixed addresses. As a result, you may need to convert the M-prefix deposit address on Crypto Facilities to a corresponding 3-prefix address in order to transfer funds.
To easily convert between the standard 3-prefix P2SH address format to M-prefix, you can use this open source tool provided by the Litecoin Foundation: https://litecoin-project.github.io/p2sh-convert/ The source code can be viewed here: https://github.com/litecoin-project/p2sh-convert
Lets say your deposit address on Crypto Facilities is: MV5rN5EcX1imDS2gEh5jPJXeiW5QN8YrK3
Now you go on your favourite exchange and request a withdrawal to this address. But you get a validation error saying this is not a real Litecoin address. As a result, your withdrawal is rejected.
To resolve this, all you have to do is convert this M-prefix address to its 3-prefix address. When you convert it, it displays: 3Nsi4BpeZtsLQvkn8p6PZfHFPoUxKbJ1YY
These two addresses are interchangeable. If you send 1 LTC to the 3-address, it will be the same as if you send to the M-address, the underlying keys are the same. The only difference is that some wallets support only 3- and not M-.
If you find yourself in this situation, encourage your wallet provider or exchange to upgrade their Litecoin Core node to the latest version and use the converter tool to accomodate the transfer in the meantime.