Quote from: Andreas Schildbach on May 03, 2013, 09:08:06 AM

Quote from: accesscoin on May 03, 2013, 04:55:24 AM

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.