http://www.reddit.com/r/Bitcoin/comments/rim7t/hey_rbitcoin_got_coins_enjoy_the_female_form/c46bi6t
You put a dollar in your bank account. Someone withdraws a dollar after you and gets your dollar bill. You still have a dollar in your account even though someone withdrew "your" dollar.
The bank doesn't have a separate cash drawer for every customer. Neither does instawallet.
Every 'deposit' you see in blockexplorer is a real donation. Not every 'withdrawal' you see is a withdrawal by the owner of that instawallet.
But my account balance wouldn't show a dollar being sent elsewhere from my account. My account doesn't show individual dollars as entities, they only show balances. Equivalently in Bitcoin, there is no such thing as individual bitcoins with their own entity, there's just transactions. So what is instawallet doing there? Still confused.
Looking at LadyBytes' second account:
http://blockexplorer.com/address/1J7T1xQk2mdEEb5wkP73EtXTox6vWvE7ML
There's a 1BTC "Sent" tx right before my 1.23 donation. Apparently it wasn't her. So what's going on?
don't know why you're confused by this... it's the same thing that happens at exchanges like mtgox.
even though you get a personalised deposit address, coins come out of that address to pay other people's withdrawals.
try to follow this...
1. instawallet launches and is a brand new web site
2. two people each get an address, and each deposit 10 btc to 'their' address.
3. person 1 decides to withdraw 8 btc: this causes 10 btc to come out of his address, and 2 btc of that gets sent to a 'change' address belonging to instawallet. this change address does not correspond to any customer addresses.
4. person 1 checks block explorer and says WTF i only withdrew 8 btc but it says 10 btc sent.
5. person 2 decides to withdraw 2 btc, this causes instawallet to send it from the change address, since it has a 2 btc transaction there.
6. person 2 checks block explorer and says WTF i withdrew 2 btc but my address still says 10 received and none sent.