Bitcoin Forum

Greetings fellow bitcoiners. I am no Pro in the world of Bitcoin for sure.But I have learned enough to open a new wallet with Blockchain.info and am about to fund it with about 0.5 BTC through bank deposit.I am still unsure about the mechanics of bitcoin payments.I am also confused about what others have told me ,that the full amount in the wallet will be used, like say I have 0.5 BTC in my wallet and the vendor charges 19.8mBTC for their product,will the entire sum of my wallet be used or is there a possibility that I can get the remainder balance/change into my wallet after deducting the vendor/miner fees?And btw can mBTC be deducted from Bitcoin? Terribly sorry for my ignorance. :)

Yes you'll get your change back of course. What the person was talking about was change addresses (https://en.bitcoin.it/wiki/Change). You don't need to worry about that, change addresses are a feature that makes your Bitcoin payments harder to track, they often confuse people who try and track their coins and they see the coins are being sent to strange addresses.

How it works is if you were to send 19.8mBTC to someone and you had 0.5BTC in your Bitcoin address, your client will actually spend all of the 0.5BTC and send back the remaining 0.49~ BTC change to you at a new Bitcoin address, which makes it harder to track but also confuses lots of new users as they expect it to go back to the same address they sent from.

The unit doesn't matter either, though you might have to convert to BTC from mBTC if thats what your wallet is denominated in.

Thank you so much Blazr, for your helpful reply and clarifying those uncertain points for me. I really appreciate it.:)

Blockchain.info is different from most wallets in that it sends the change back to the original address.

Also, in case it isn't apparent, 1 mBTC = 1/1000 BTC and 1 bit = 1/1000000 BTC.

Thank you odolvlobo for your info and reply. Yes blockchain is the hot wallet that I am currently using.So I can expect them to return the balance to my bitcoin address? Thanks again. :)

Here is what a typical transaction using the blockchain.info looks like: https://blockchain.info/tx/58abba95b431e6260f9335acf0d00eb4f343389b47d7307c45eb5f73609d2762

If you look at the transactions involving 1ERj1taMSKngY9zngqkatxRXHFrJdSUsj1 (https://blockchain.info/address/1ERj1taMSKngY9zngqkatxRXHFrJdSUsj1) you will see that every time bitcoins are sent from the address, the change is returned to the same address. That is typical for a blockchain.info wallet, but it is not how most other wallets work.

Are you using the wallet on your computer? If so you may want to reconsider and go for a different type of wallet as your machine will always be the weak link in security. Set up 2FA at the very least.

Most other popular wallets are HD. They'll create a new address for every transaction but you'll still have an overall balance that change will be returned to and you can spend.

The general idea is that you, as the end user, won't ever realize there's a change address. It happens, but it's not really your concern -- all you really need to know is that you spent x and have y now. So don't let the whole "change address" thing confuse you.

i just want to add that you can change where the rest of bitcoin goes by choosing the custom send method in blockchain.info. you can set multiple receiving addresses, set custom fee and in the end choose where the change goes by giving it a change address to send them there.

@odolvlobo, gentlemand, ranlo and pooya87! Thank you all so much for all your replies and very useful information.

@odolvlobo many thanks for those blockchain links regarding bitcoin payment/receive transactions.Very
informative.
@gentlemand, yes I am using the blockchain.info on my computer but I have been told to try the wallet at
https://greenaddress.it/ which many have said have safer privacy and security mandates.
@ranlo,thank you I will remember that
@pooyal87 thank you for alerting me to those blockchain features.I have emailed them on the specifics for
utilising those features.
Also many thanks for recommending me to read the article at
http://bitzuma.com/posts/five-ways-to-lose-money-with-bitcoin-change-addresses/
Very informative and helpful indeed!
Thank you so much all,I really appreciate all your kind help and info.

Blockchain.info in theory should be quite secure. They offer pretty good security features, allowing you and only you to be able to access the private key thus no one else can spend it. However, they have incredibly bad reliability due to their recent downtimes and several security vulnerabilities which could have been avoided. Greenaddress.it is quite a good choice but the android app is slightly buggy for me. I would recommend either Multibit or electrum for the best ease of use as you can easily forget your mnemorics on greenaddress.it.

Yes but you can export a backup of the wallet, and in case they get shut down permanently, or they lose your wallet, you can still recover your funds with another wallet provider.

What if there is a bug in their wallet generation process? That is what I meant by unreliability. This has happened twice and could potential caused thousands of users their entire Bitcoin savings. Greenaddress.it takes a less conventional way that is to use nlocktime but it requires you to wait in the event that they get shut down. Correct me if I'm wrong.

Well if they happened twice already then its a bit unreliable. They either fixed it already, or they are very unreliable.

Either way I would not hold more than 0.1 btc in an online wallet. Usually that amount is enough for you to spend your average bitcoin payments. Whenever you spent it you just refill it from your cold storage wallets.

For online wallets (read: hot wallets) I would just use an insured system, like Coinbase, Xapo, Circle. Problem solved.

I don't know guys, but I am scared as hell with the online wallets. I like to be in a sole possession of my private keys and not have to depend even 1% on somebody else. Even with blockchain.info, you do possess your private keys, but there are still the things that can go wrong.

As for the Android, I don't see why would anybody use something else but mycelium. This thing is so easy, but free, very safe, and one of the nicest applications out there for the Bitcoin in my opinion.

But then you trade privacy for security, as they will ask you for all documents, and they already censor some transactions.

Big brother will decide what you can buy and what you cant, not you!

I've given personal information to exactly zero of those, so not sure where your information comes from.

Coinbase:https://m.reddit.com/r/Bitcoin/comments/2mcp4w/warning_do_not_use_coinbase_as_a_wallet/. There was also a bug which allows attackers to bypass 2FA by writing some codes. I feel that this is quite a serious issue.
Xapo:https://support.xapo.com/how-do-i-verify-my-phone-number I had to verify my account last time I used it.

Since they are registered businesses, they would be obligated to send private transaction info to the authorities. Furthermore, with no control over your private key, it would be quite hard to withdraw them with guaranteed 0-delays. In the event that the site gets offline due to an attack, you would have to wait before being able to retrive your bitcoins back.

Your verifications are about buying and selling. I've used Coinbase for over two years with no issues. Withdrawing instantly isn't an issue, as, again, I use it as a hot wallet. Cold storage for coins that matter.

Bitcoin payments are not that much complexity bro.suppose you send some coins to your friend then it will be recorded in a ledger which will be brodcasted to public in blockchain.info and bitcoin miners will conferm it and as soon as it gets conformed your friend can use those coins

Regarding Coinbase,well I am glad to learn that they are finally accepting my country Singapore. However I also hear that they don't allow you to store your own private keys.So essentially they have total control over your Bitcoin? And their privacy policies, like their KYC rules demand all kinds of verification documents to qualify as a Level 2 buyer/seller of Bitcoin on their exchange.Any truth to these? Thanks!  :)

Thanks ranochigo.I am quite apprehensive on hearing about their security vulnerabilities. Hopefully such vulnerabilities have since been patched and fixed.Do you recommend Multibit as a viable hot wallet?

Those vulnerabilities has indeed been fixed. I still wouldn't trust them considering that both could have been prevented by pentesting the script before updating the website and the another vulnerability actually existed for quite a long time. Multibit is quite a user friendly hotwallet, its quite simple while offering all the basic features.

I used to use multibit a lot but I don't like anymore. It has had some concerning issues in the past that caused people to lose money and the developers didn't seem so interested in getting to the bottom of it, it really damaged my trust in them. It's free wallet software written mostly by volunteers, they don't have the resources to properly deal with serious issues like that.

I would highly recommend electrum however, it's an absolutely great piece of software which I've had very few issues with ever. It's a very quick, lightweight, simple and secure bitcoin wallet which can be used for almost any situation. The developers have a clear vision for what they want to make and have simplified things that used to be very difficult for new users to do.

i confirm that, i have been using Electrum for over a year now. never had any problem with it. there is always servers that you can connect to and it is fast and secure.
on top of that the developers are active on the project and you can find ThomasV (not sure about the spelling) on the Electrum section of forum helping and checking out users problems.

It's also worth noting that you can recover wallets of you remember the passphrase, which is awesome.

so long story short, just go with the reputable desktop wallets like the bitcoinqt lol.

also while were on the topic of wallets, I sugges to avoid blockchain as well since they have past history with losing btc.

I haven't heard of them losing BTC, just being offline due to things like DDoS. And BitcoinQT is definitely the most reputable wallet.