Let me see if I got this right. So if you have a certain amount at an address and send out part of that amount, EVERYTHING you had at that address is moved out and the change is deposited at a new address? Why isn't the change kept at the original address?
The major reason is to give users better privacy. If there is no change address, someone else monitoring my address will see how much I have spent my bitcoin every time I make a transaction. But if there is a change address, you will only see I have send some bitcoin to address A and some bitcoin to address B, without knowing which of the two addresses is my change address.
Thanks for replying. So if I have a backup of my wallet.dat file I need to make a new backup every time I send coins, because there's always the possibility that the change will be moved to a newly generated address (if it runs out of pregenerated addresses or something) that doesn't exist in the backup file, right?