When a Cardano address is entered for payment, Daedalus identifies it as a valid address immediately. Even if there is a single character change, it shows it as an invalid address. Were are these addresses stored and how it is identified as a valid address.
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There are two verification mechanisms, giving a certain level of certainty it's a valid address.
First, the wallet software can check it's valid address discrimination: Cardano Shelley mainnet addresses start with addr...
Second, the address - being a bech32 encoded string - has a checksum. This checksum for the given string length is not fully bulletproof but in almost all cases allows an instant offline validation for the given address.

Markus G
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1For those interested in code/function validating Shelley addresses see here: https://input-output-hk.github.io/cardano-addresses/haddock/cardano-addresses-3.2.0/src/Cardano.Address.Style.Shelley.html#inspectAddress – Markus G Mar 04 '21 at 09:59