Topic: Paper wallets question (Read 274 times)

Wallets didn't send coins into oblivion... coins ended up in oblivion because users didn't know or didn't understand how their wallet software dealt with "change".

Typically, what happened was that a user had say 1 BTC on paperwallet AddressA. They would import that key into a wallet, then they would create a transaction sending say 0.5 BTC to AddressB... The scenarios for what happens to the change were:

1. The wallet software sends the change back to AddressA. (What most users thought would happen)
or
2. The wallet software creates a new, random private/public keypair, derives AddressX from that keypair and sends the change there. (What a lot of wallet software did). The user would then uninstall the wallet and/or delete the newly created wallet file (without realising they needed a backup of this new wallet and/or keypair)


So in scenario 1, the user is fine, they still have the paperwallet with the private key and access to the "change". However, in scenario 2, if the user destroyed the wallet file (without any backup), they lost access to the new, randomly generated keypair that they need to access the change that is now in AddressX.

It doesn't really matter which way wallet software deals with "change"... as long as the user knows and takes the necessary steps to maintain access/control of the necessary private keys, then they won't lose anything.


There is a reason paperwallets are not recommended for new or inexperienced users

  Thanks Dave! Will look into this.

Yes, there are a few ways.

https://coinb.in/
Download the source, copy it to an offline PC.
From there you can enter your private key enter all your inputs and create a transaction.
You can then copy it to USB and broadcast it using one of a few services.
You have to know your inputs and all the other info or it will fail when you broadcast it.

The other option is use the full bitcoin client. Go online and download the full blockchain. 300+GB
Then go offline and import your private key(s)
Then you can create your transaction. There are a few places that give guides
https://bitcointalksearch.org/topic/m.7306076
or
https://medium.com/coinmonks/how-to-create-a-raw-bitcoin-transaction-step-by-step-239b888e87f2

There are other guides too.


None will (if programmed well) send them to oblivion. Some like Mycelium will send back to the original address. Others will send to an address generated by the wallet.
As was said the oblivion issues happen when you import a key with 1BTC and spend .5 and get .4999 back as change sent to an address generated by the wallet. If you think that the change is in the paper wallet and don't save the hot wallet from the app or send the BTC back to the paper wallet address it's gone.

-Dave

   I like that idea of entering the key by hand. Will keep that in mind...thanks

   I told Mycelium to send to a Trezor address. So I have no issues with Mycelium at all and it did mention the btc that was sent back..I thought it was a miner fee which I accepted as long as the majority of the btc went thru I am very happy.

   Mycelium did a great job as far as I am concerned and will keep using. But what about other wallets, will they send back to the original pub addy or into oblivion?

DaveF said it best: a paper wallet is just a private key ( + address ) printed in a way or another.
Many people don't realize that the coins are not in the wallet, hence most probably don't take all the precautions when sweeping.

Bugs in wallet software can also easily send the change to an out-of-the-belly address (hence "to oblivion").


Of course, these are only ideas of what possibly can go wrong, I've never experienced any, since (believe it or not) I preferred to enter the private key by hand into Electrum and use it like a wallet, instead of using the "sweep" feature.

It shouldn't go to another address. What Dave meant was for the change to be sent to an address that is generated from the seed MyCelium has generated for you. I haven't used a paper wallet in quite a while so I'm not sure if that happens.

I honestly don't think MyCelium would be incompetent enough to make such a mistake. Could you send the transaction ID so we can see what's happening. I think it's unsettling to know that it doesn't sweep the paper wallet completely.

 Dave...thanks for the replies....but need further clarification on this..

  And what would that be? Thats what I meant by oblivion. If its not going to the original public key, then where is it going? Thanks again man..this is enlightening

Usually they thought the change went back to the original address but it went elsewhere and they trashed the wallet it went to.
Change either goes back to the original address (bad practice for privacy) or to some other wallet generated change address. If you import a key, send some funds and then trach the wallet if it sent funds back to a newly generated change address your screwed.....

-Dave 

   Miners fee was a few dollars which I wanted to confirm pretty quick..mycellium gives you the option.

   And I have been using Mycelium for years and I love it.

  Yes thats why I love Mycelium and thats escalty what it did. That was new to me.

 And paper wallet will never be used again once it has been exposed to the internet.

 Speaking of, is there anyway to sweep a paper wallet and not expose to the internet? I mean conduct the transaction offline and then transmit onto blockchain without exposing your private keys?

So how much miner's fee did you pay? Do you have the relevant TXID? Did you specify any amounts to send? Could provide some clues as to why this is happening.

I haven't seen MyCelium's source code for quite a while, I don't like mobile wallets in general and find them pretty poorly maintained actually.

  Yes there were multiple deposits thru the years on the address, but why would that matter as they all share the same pub and private key.

  I always read that many people lost lots of BTC when they did not do one sweep for the entire balance as the remaining BTC was sent into oblivion.

Your impression is wrong. Mycelium is able to send part of the funds and will send back change to the paper wallet address.

Issues here are that not all wallet software knows how to handle change in that situation.

If the transaction is constructed poorly it might leak the private key.

There might be yet unknown issues that will allow reconstruction of the private key.


So the recommended way is to use a private key only once and sweep all funds.

Very basically:
A paper wallet has an address on it with a private key.
You can import the key and use is normally or some apps will sweep the funds into a new address when you import the key.

Now, in theory it should sweep all the funds less the transaction fee into the new address.
For some reason it swept most of the funds to the new address and left a little change and sent it back to that same address.

Or there was more then 1 input on the original address and the sweep did not sweep all the inputs.

-Dave

 Recently I redeemed a paper wallet I had made a few years back using the Ubuntu CD with BIP32 encryption.

 I redeemed using Mycellium and all went well except I noticed something that I need some explanation.

 When I sent the 1 BTC to my Trezor address, Mycellium somehow sent back into the wallet 0.001. The message did come up about some miner fee of same value and I just clicked OK as I wanted to get it out and

 have no issues with miners fees etc etc

 My trezor received the 1 BTC minus the 0.001BTC so all was good. I then looked up the balance of my paper wallet and the 0.001BTC was still on there.

 So I swept the wallet again and voila, I was able to sweep this remaining BTC with no issues.

 The question is, I was under the impression that if you do not sweep ALL of your BTC from a paper wallet in one sweep, you will lose the rest of the BTC FOREVER!



 I then made a new paper wallet using the same Ubuntu CD with a BIP32, tested it with a Casascius program and a Mycelium on cell phone with antenna removed, wifi disabled/airplane mode to make sure

 the Private key password and pub key all match before I loaded it with BTC.  Laptop is cold gapped as well, wifi disabled and antenna removed. So three step verification, Ubuntu,Casascius and Mycelium.

 This time I used a different waterpaper and you can see the underwater experiment conducted here...https://bitcointalksearch.org/topic/--5296179 The papers are water proof and very resilient. No worries of water

to soak the wallet issues.