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Comment by kzrdude | Hacker News Reader

Bitcoin clients usually try to diffuse coin ownership by always sending two amounts with one transaction, one (normally smaller) amount is to the receiver, the second amount is to a new address of the sender. So your coins diffuse out over tons of addresses this way, and the true number of coins transferred between individuals is much less than it appears.

It can also be extremely unhelpful, for example to this chap today on reddit:

http://www.reddit.com/r/Bitcoin/comments/1bd1d1/i_think_i_ju...

Who didn't seem to know about return transactions and seems to have lost 90 BTC on that. (Because he/she used a "secure" live environment that would work with a temporary wallet and just one extra address with his/her money.)

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The problem here is that brain wallets and paper wallets have become popular.

Brain wallets are always a terrible idea, either the pass phrase is too simple and easily cracked, or too complicated and easily forgotten.

Paper wallets are only useful for savings, if you want to spend the coins you should move the full amount.

As said elsewhere, if you use the stock client as designed, and don't use brain or paper wallets, then you should never lose coins.

The android wallet is pretty nifty.

And this mistake of trying to be ultra-secure, without understanding change addresses, is a classic way to destroy BTC. It also bit someone for 7208 BTC way back in June 2011:

https://bitcointalk.org/index.php?topic=11104.0;all

That 7208 BTC would be worth about $680,000 today.

There will be a lot fewer than 21 million BTC in actual usable existence after all these errors are tallied!

Sure, but it doesn't make it any less usable for the others, it fact it increases everyone else's purchasing power

Wow I can't follow that at all! Now I'm scared to ever spend my bitcoins!

He only got into that situation because he was using the software in a non-standard way, and he inadvertently deleted the "change-wallet" that had automatically been created for him.

As long as you use the software in a relatively standard way and don't ever delete your wallet files, you'll be fine.

This. If you save all wallet.dat files on any bitcoin clients that you use for transactions, you'll be fine. Don't be scared off by someone using the bitcoin client in a non-standard, unapproved way (and as long as you use the GUI and not the command line interface, you'll not have to worry about that).

Just make sure you understand the software you are using. This mechanism isn't good for the user since you negate the efficiency of backups if your coins constantly move from older addresses to freshly created (unprotected until next backup) addresses.

Some bitcoin clients fix this by using a deterministic generation of new addresses for the wallet.

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