What happens if I purchase a bitcoin with USD and enter an address I think is working but doesn't actually work. Is there some failsafe system?
That depends. If you just enter a completely random set of characters, or make a typo while entering an address, then there is a 4-byte checksum built in to the address. Any reasonable wallet and/or service should verify the validity of any address by checking that checksum. As such, the odds of accidentally stumbling across a typo or random set of characters that passes the checksum test is 1 in 4,294,967,296 On the other hand, if you enter a completely valid bitcoin address that you don't have the private key for (such as accidentally entering someone else's addresse instead of your own), then the bitcoins will go to whoever has the private key or that address. If you enter a valid address that nobody has the private key for (such as an address that you previously had from a wallet on a computer that crashed without a backup), then the bitcoins will be registered in the blockchain, but will be unspendable by anybody.