I am lost in bitcoin wallet and private key

[CrapMan]

Ok I got that part, both of them will get the payment,
BUT both of them are able to spend it too. REASON: I send the bitcoin to an address, has nothing to do with private key.
John Address is : AAAAA
Sarah Address is: AAAAA

so both open their wallets, they see 10 bitcoins I sent

Even if they have different private keys, since I sent it to an address and not a private key, then the transaction will show on both and both are able to spend it, just a matter of who spend it faster!

This part is correct.

Now John will spend 3 bitcoins.
Then it will show both of them have 7 Bitcoins left.
Then Sarah will spend 5 bitcoins.
Then it will show both of them have 2 bitcoin left.

Just a side note, when bitcoin are spent, you can't use a transaction output partially.
So, if John want to send CrapMan 3 BTC with a piece of "10 BTC" on his address, he need to create a transaction with that 10 btc as input, a output of "3 btc" to address 1 (controlled by CrapMan) and a output of "7 btc" to address 2 (controlled by John).

For most wallets software, by default, the wallet will generate a new change address every time to improve anonymity.
So, after John spend 3 btc, the common addresses held by John and Sarah will have nothing on it.

FYR: https://en.bitcoin.it/wiki/Change

Ok you got me lost, you are way way smarter than me!

I sent John 10 BTC, John received them,
an output from my wallet was created, an input for John's wallet created.
John has now 10 BTC,
now John spent 3 BTC at amazon, an output of 3 BTC for John, an input of 3 BTC for Amazon

BUT I think you are saying my example of (John and Amazon) is wrong when you say partial output,
if I am not mistaken: you are saying that the whole BTCs in the wallet create an output even if you spend only part of them? like when John spent 3 BTC on Amazon from that 10 BTC, it means: an output of 3 BTC created to amazong and another output for 7 BTC created to John (output of his own money to his own wallet)?

[Rampton]

Why is this particular instance such an issue? The chances of this happening are astronomical.

[CrapMan]

Why is this particular instance such an issue? The chances of this happening are astronomical.

It is not an issue, but I like to understand how things work.
Simply put: Would you go buy a car if you don't know how to drive?

[hilariousandco]

Why is this particular instance such an issue? The chances of this happening are astronomical.

It is not an issue, but I like to understand how things work.
Simply put: Would you go buy a car if you don't know how to drive?

I think a more apt analogy would be going to buy a car and asking the dealer how a combustion engine works and what are the odds of it blowing up and killing you.

[sgk]

Ok you got me lost, you are way way smarter than me!

I sent John 10 BTC, John received them,
an output from my wallet was created, an input for John's wallet created.
John has now 10 BTC,
now John spent 3 BTC at amazon, an output of 3 BTC for John, an input of 3 BTC for Amazon

BUT I think you are saying my example of (John and Amazon) is wrong when you say partial output,
if I am not mistaken: you are saying that the whole BTCs in the wallet create an output even if you spend only part of them? like when John spent 3 BTC on Amazon from that 10 BTC, it means: an output of 3 BTC created to amazong and another output for 7 BTC created to John (output of his own money to his own wallet)?

Not the whole wallet balance has to go out, only the BTC you received in a single transaction.


Think of it this way:

Someone gives you a $50 bill and a $20 bill. Now your pocket has $70. (That makes 2 incoming transactions for you)

You now need to give $40 to James Bond. What you will do is take out the $50 bill (from a single incoming transaction) and will split it into 2 bills: a $40 bill and a $10 bill. The $40 bill will be spent in the outgoing transaction and the $10 bill becomes the incoming transaction for you, which goes back into your pocket. You now have $30, which comprises of one $20 bill and one $10 bill.

The $10 bill becomes the incoming transaction for James Bond.

If James Bond needs to spend an amount smaller than $10, he will also go into the same process as you did.

Now think of the whole process again by replacing 'pocket' with 'wallet' and 'dollar bill' with 'Bitcoin'

[hilariousandco]

You guys are just making what is quite simple complicated and confusing with these explanations  .

[baokychen]

All you need is to backup the .wallet or .dat file inside your %AppData%\CoinFolder

or ~/.coinfolder/ if linux

[Loophole]

You guys are just making what is quite simple complicated and confusing with these explanations  .

+1.
All those explanations are pretty much correct, but I don't think an ordinary user (esp. a new bitcoiner) need to understand that much.