Bitcoin Forum

I've got my bitcoin in cool storage - basically in an encrypted virtual machine on a separate computer (bare metal hypervisor) from my main machine. I've done a video on this in the Electrum forum if you're interested in the details. Anyway, I think it's pretty secure. I have a watching only electrum wallet on my main PC which I look at from time to time, and I also have my addresses including the next five deterministic addresses in my blockchain.info wallet.

I sent a donation to Andreas's Dorian fund from cool storage using my USB stick to get to my private keys and all was well, everything went through as expected. I logged in to my blockchain.info wallet last night and noticed that there were some significant BTC missing from my wallet.  :o

I started to panic thinking that my cool storage had been compromised, but I couldn't understand how because the cool storage VM is always powered off unless I want to spend. Also, only one address had been drained, all my other addresses were fine.

Can you guess what the problem was? The BTC were not stolen.

Come on, what was it? Guess before continuing...

















I had forgotten about how change addresses work. Sure enough my wallet was complete when I expanded the change addresses section in electrum. I have now added my change addresses as watching addresses in blockchain.info and my balance is exactly how I expected, nothing missing.

Just thought I'd tell my story, because my heart was really racing last night! Anyone had a similar experience?

Glad you didn't have a heart attack, I can already see the headlines "bitcoin kills people!".  ;D

I had that happen as well. Freaked out the first time.

And it happened a few times after that as well where the initial check of the address caught me by surprise.

Yes, change address is a killer! There was one time I thought I paid around 0.1 transaction fee, but in fact it went into a new change address ;D

Yep, done this myself, it doesnt help that electrum collapses change addresses as well as even when I saw the correct balance it didnt tally up to my receiving addresses. Glad all is well!

I know I will get bashed and laughed at for this but I need to ask:
What is a change address?

Sorry, I don't have much BTC due to the fact that I spend more on miners than I produce (yes I am addicted) so I don't freak out like all of you in case it is stolen.

I have a mini heart attack everytime I type in my electrum 12 word seed and it takes longer than 10 seconds to work and return "wallet successfully loaded".
 ;D
That said... It loads everytime!! 

Bitcoins do not exist, at all. (mind blown, right?)

Instead, they exist as outputs from previous transactions, just a mark on a ledger. If I make a cold wallet and I send 5 BTC, I will have a cold wallet with one output worth 5 bitcoin.

Now, if I want to donate 1 bitcoin from cold storage I must destroy the entire 5 BTC output by using it as an input for a new transaction. Therefore, a transaction would need to have two outputs (or the change, every last bit of it, is recycled and given to the miners! The sum of the outputs of a transaction, minus the sum of the inputs is equal to the transaction fee paid. Don't play with paper wallets and rawtx!) One could probably divert the change right back to the same BTC address, but the coins are not the same, the original 5.0BTC is gone forever. Reusing addresses isn't really a good idea, so by default most wallets make a new bitcoin address for change and send it there. If you had a watchlist of addresses for a total, it would look as if some coins outright disappeared, when you really aren't just looking in the right "pocket" for your money.

A very important question indeed.
And not always just a momentary fright -- some people have actually lost large amounts of bitcoin as a result of not understanding "change" addresses.

OP how much BTC did you think lost? ;)

5BTC

damn! wish i didn't delete all the BTC from my first account!!

https://blockchain.info/address/1KBSEWtMHa4UzmamK64BwTXwgb3UNoB3ev

This happened to me too. I was desperately clicking around on blockchain.info until I realized how it works with change addresses in the satoshi bitcoin client.

Well, I'm glad it's not only me! I really thought I had understood how bitcoin works. It is unnerving being your own bank...

Haha wow that would have been disheartening! I flipped when I though I lost all of my merely .2 BTC!

Don't worry man, if you have any bitcoins you are already secure

Thanks brother :)