Lost BTC while using Bitcoin Wallet for Android.

[accesscoin]

So I ended up losing 0.997 BTC but want to warn others how to avoid my mistake.

Let me start by saying I am a tech geek, and one that I like to do as a tech geek is flash custom ROMs onto my phone. So here is the series of events.

2013-04-12 10:00:00~ : I install Bitcoin Wallet for Android on my phone
2013-04-12 18:11:25   : I send 1 BTC from my main wallet to my phone address
2013-04-13 17:58:38   : I send .001 BTC to friendA for testing
2013-04-14 12:00:00~ : backup my phone via client to google drive.
2013-04-18                : I factory reset and flash my phone then restore my wallet. (everything is good)
2013-04-26 14:41:58   : I send .001 BTC to friendB for more testing
2013-04-28                : again factory reset and flash phone the restore my wallet. (everything is VERY VERY BAD)

Root cause: On 04-18 my Bitcoin Wallet created a second change pool when it started. Then I restored my original change pool to the wallet. When I sent .001 BTC on 04-26, .997 went to the change pool that my wallet created and not the restored pool. The factory reset and flash on 04-28 cause me to wipe the change pool that was not backed up. Send the BTC to the digital abyss.

Suggested solution.

• Backup you wallet right before you flash your phone.
• Have bitcoin wallet give a warning when you import a backup. That you must backup again to have all your pools
• Have the imported backup be the default pool.

I have contacted the author with the link to this thread in case he would like to implement any of these notifications.

https://blockchain.info/address/1AVCRW2JwhCVBB9HRG8TsCKSkJixz4ec4r - phone address
https://blockchain.info/address/13AkCg11iZdXDoAuJPz4xEoBb2Pwj5SCmM - the .997 BTC lost to the digital abyss

donate to my lost bitcoin fund @ 14z4BrwZH3veZ2cVK6ndwxo7VzNnEtuXo2

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[dhenson]

I would just like to say thank you for taking the time to help educate those on how to avoid a fate similar to yours.  I speak from experience when I say that it's hard to keep calm when you realize you've lost btc forever.  I was however fortunate in that I didn't actually end up losing anything except my misunderstanding of how change works.

Well worth the tip.

[Stephen Gornick]

• Have bitcoin wallet give a warning when you import a backup. That you must backup again to have all your pools
• Have the imported backup be the default pool.

Just to clarify, Blockchain.info/wallet does not use any key pool like the Bitcoin-Qt client does.  

If you are using Quick Send, then the change goes to an existing address that should already have been in the backup if you described the sequence of events correctly.

If instead you used Custom transaction and chose "New Address" for change, then yes -- you need to make a new backup after every one of those transactions.   Blockchain.info/wallet has a configuration setting for your account to allow "Automatic Email Backups" to be sent.

[Edit: The reported issue was with Bitcoin Wallet for Android by Andreas Schildbach, not Blockchain.info wallet, ... somehow I mixed the two up and gave a response that has nothing to do with the question asked, sorry.]

[Andreas Schildbach]

So I ended up losing 0.997 BTC but want to warn others how to avoid my mistake.

I'm sorry to hear about your loss. Thanks for letting us know about how it happened.

The root of the problem is because Bitcoin Wallet cannot yet manage multiple wallets (like MultiBit for example), if you restore a wallet into an existing wallet all it can do is merge the two wallets. Ironically it is designed to protect against loss, specifically for people who start using the pregenerated wallet before they realize they want to restore from a backup. The proper way to fix this is restoring into a separate wallet to keep addresses separate from each other. Unfortunately, multi-wallet is still some time (and work) away.

Currently, Bitcoin Wallet always sends change to the first address in the wallet. Which unfortunately always is the pregenerated address (it was added first). As a side note, bitcoin-qt always creates new addresses for sending the change to. Some have asked to mimic this behaviour because of privacy benefits, but I refrained exactly because it makes it so easy to loose Bitcoins. I figured it would be better to wait for HD wallets first, and then tackle the (small) privacy issue by deriving new addresses from the master key.

I can probably implement a quick fix. Rather than sending change to the first address, I could send it to the oldest address in the wallet. Either that, or it always goes to one of the addresses that were picked as an tx input. I'll discuss with the other devs and see what I can do.

[accesscoin]

Glad this topic is getting discussed! and thanks for the tip. I appreciate it!

[Iskrenv]

So I ended up losing 0.997 BTC but want to warn others how to avoid my mistake.

Please do. I lost 4 BTC because of failed Android upgrade. This all is dangerous the way it is now. I

I'm sorry to hear about your loss. Thanks for letting us know about how it happened.

The root of the problem is because Bitcoin Wallet cannot yet manage multiple wallets (like MultiBit for example), if you restore a wallet into an existing wallet all it can do is merge the two wallets. Ironically it is designed to protect against loss, specifically for people who start using the pregenerated wallet before they realize they want to restore from a backup. The proper way to fix this is restoring into a separate wallet to keep addresses separate from each other. Unfortunately, multi-wallet is still some time (and work) away.

Currently, Bitcoin Wallet always sends change to the first address in the wallet. Which unfortunately always is the pregenerated address (it was added first). As a side note, bitcoin-qt always creates new addresses for sending the change to. Some have asked to mimic this behaviour because of privacy benefits, but I refrained exactly because it makes it so easy to loose Bitcoins. I figured it would be better to wait for HD wallets first, and then tackle the (small) privacy issue by deriving new addresses from the master key.

I can probably implement a quick fix. Rather than sending change to the first address, I could send it to the oldest address in the wallet. Either that, or it always goes to one of the addresses that were picked as an tx input. I'll discuss with the other devs and see what I can do.

[letyouearn]

There is no way to recover the blockchain.info wallet till you have its private key or mnemonics saved somewhere.  

I wonder , using Android wallet , how people's are irresponsible and lost their access from where btc wallet.

[PolarPoint]

Backing up wallet is always good practice before you do anything to your computer or your phone. You can actually do more to protect yourself when upgrade or reinstall. It is to send the whole balance out of the wallet into another wallet on another system. Even when upgrade is buggy or messed up the backup, you don't loose any coins.

[saturn643]

This thread is quite old, and the problem should no longer exist. Bitcoin Wallet and its underlying Bitcoinj now use BIP32 Deterministic wallets, so all of the addresses ever generated by the wallet will always be the same, before and after imports.

[StevenLiang]

There is no way to recover the blockchain.info wallet till you have its private key or mnemonics saved somewhere.  

I wonder , using Android wallet , how people's are irresponsible and lost their access from where btc wallet.

For me, i would not try to using "online wallet" in my mobile (Android or iOS).
It's better to use it on my linux and many safe online wallet.

I see the donate button there.

[letyouearn]

There is no way to recover the blockchain.info wallet till you have its private key or mnemonics saved somewhere.  

I wonder , using Android wallet , how people's are irresponsible and lost their access from where btc wallet.

For me, i would not try to using "online wallet" in my mobile (Android or iOS).
It's better to use it on my linux and many safe online wallet.

I see the donate button there.

I only use mycelium android wallet where I can easily sign a bitcoin message via application only.  No need to login on browser to my btc wallet. I found mycelium wallet very comfortable to use.

To make it secure and recoverable,  you just need to have to your mnemonics saved  on a paper.