It sounds like they are lost for good.



Lesson to other people: Remember you need to back your wallet up after every transaction!
(The wallet metaphor is actually a bad one, because it makes problems like this more common than they should be.)

Edit: (more explaination)

When you do a transaction you always spend ALL of the coins in that address, part of the money goes to whoever you're paying, and there rest is returned to you an a new 'change' address. (This helps your anonymity as someone watching cannot tell which amount you spent and which amount you kept.)

Before transaction:
Address1: 9000
Address2: 0

After transaction:
Address1: 0
Address2: 1
Address3: 8999

It sounds like you have wallet.dat that contains the private keys for Address1 and Address2, but not Address3.
(Although the numbers in your story don't add up.)
What were the Bitcoin addresses? (If we know these we can do some more in-depth block chain research)

Yes, I do.

I saw on another thread that gavinanderson has made some tools to do more in depth research but did not know how to proceed.

If you could point me in the right direction I would greatly appreciate it.

I used bitcointools: http://github.com/gavinandresen/bitcointools
To look for your transactions in the block chain.

(Here are the edited highlights)

So the transactions are definitly in there.
Your only hope is to have the private key for the 167ZWTT8n6s4ya8cGjqNNQjDwDGY31vmHg address.

If you can get bitcointools working you can dump your wallet.dat using:
which will show you all the keys you know about in your wallet.
But you'll probably find that 167ZWTT8n6s4ya8cGjqNNQjDwDGY31vmHg is not in there

On the upside, (although it is probably of no consolation to you) there is now a decent bounty for anyone who can find an address collision...

_{Edit: I'd pasted the wrong block number and date for the first block. Fixed.}

Ugh, that's awful.

I added to the FAQ the warning to back up after each transaction. Is it necessary btw to stop the client before making a backup? That's a bit inconvenient. Automatic backups would be useful indeed.

If you backup a spreadsheet, do you not expect to lose changes you made after that backup when you restore?

There are many types of transactions that will survive a wallet restore. This is one of the circumstances in which you will lose coins.
If he'd transferred all 9000 to the address he would still have them.

I'm not trying to blame the user. I agree this is a problem that needs to be fixed.

This problem has been previously identified and there are plans to implement a fix, which has been talked about in the Privacy versus Safety: handling change thread. But it has not been implemented yet.

Perhaps a bounty is in order?

According to the theory, generating a address collision is so remotely unlikely as to never happen.
(You're more likely to get struck by lightning, win all the worlds lotteries, and then get abducted by aliens on the same day.)

However if you manage to find a weakness in a) the encryption method or  b) Bitcoins implementation of it. it may make it easy enough that you don't have to get abducted by aliens as well.

So they practically are lost forever.

I think Satoshi proposed a protection against this in the following post:

Good to know this, I thougt I was save with my backups, but it could have happened to me to.
Stoneman didn't really do anything stupid. 

A simple solution to this would be to store your wallet.dat on an encrypted partition that goes to an S3-based storage system, like Dropbox. They'll keep versions for you on update.

This would make a nice opt-in service that could be sold in the native client as a way to help fund research, by the way. The data storage needs are incredibly small.