change addresses

[inf]

hello,

my first post here

recently read this thread: https://bitcointalk.org/index.php?topic=145172.msg1540016#msg1540016

I was thinking how the "change addresses" thing will cause problems eventually. Why? Well because 99% or more of bitcoin users do not know about that, they think that if they have BTC in the address A and they spend some of them, then they will just have less btc in address A. They make a paperwallet, backup, or whatelse and meanwhile use it.
Then when one day they will use the paperwallet they will notice that the btc are no more in that address but in a new one due to how the "change" works.
Or not?

I know about the fact that changes may be returned to another address in the same wallet. but how does this affect me, if I keep coins in a paper wallet, maybe add funds over time and someday import back the private key in any client/wallet? how could I lose my coins?

Thanks,
inf

[Gabi]

You receive coins to address x. You put address x on paperwallet.

Then you spend a part of the bitcoins on address x. The "change" is sent back not to address x but to a NEW one. Why? For anonimity. Nothing of course stop the client from sending the change to the address x, but this is not how the bitcoin-qt client work. It does not even offer the option to send it back to x address... and almost no one know about this thing.

Now, if you later lose the wallet on bitcoin-qt and you use the paperwallet, well, btc no more are on that address... they are on a new one. Surprise  And that new one of course is not on the paperwallet.

As you notice by reading that thread there are some services who send the btc back to address x

[inf]

thanks for your fast reply!

so this does not seem such a big problem to me because as franky1 wrote in the original thread, after importing the printed private key into an "electronic" wallet the paper address gets kind of compromised and part of the set of addresses in the electronic wallet. no use for the paper anymore.

IMO keeping this in mind (and also with common sense) there is no need to worry about change addresses.

[John (John K.)]

thanks for your fast reply!

so this does not seem such a big problem to me because as franky1 wrote in the original thread, after importing the printed private key into an "electronic" wallet the paper address gets kind of compromised and part of the set of addresses in the electronic wallet. no use for the paper anymore.

IMO keeping this in mind (and also with common sense) there is no need to worry about change addresses.

Just make sure you back up the entire wallet.dat file regularly, especially if you have a lot of outgoing transactions as the change addresses might not be backed adequately. I still prefer using Armory/Electrum with the change option turned off though, just to ease the accounting and backups.

[DannyHamilton]

- snip -
Why? For anonimity.
- snip -

And increased security.

[Gabi]

Oh right true that