Even then, whenever you’re dealing with large amounts there’s risk. E.g., early on in Bitcoin’s development a user lost a lot of Bitcoin by making a small test transfer, not realising that the change (their remaining balance) was sent to a new address in their wallet. But they were running a bootable Linux Distro from a CD and didn’t save the wallet back to a USB or other permanent storage. So they’ll never have access to those keys.
How was this possible, for the change to be sent to a new address? If I understand correctly what you're saying is that the account was split in two: one part went to the wanted destination and the rest to an unwanted destination.
Yes, this is how Bitcoin is designed and has worked from the beginning. The problem is his wallet did save the private key for the change address he just didn’t save the wallet, so it was lost - the changed address wasn’t unwanted, it was wanted, it just didn’t get saved. I believe early Bitcoin wallets generated addresses randomly so you couldn’t recover everything from a seed and had to save your wallet.
Ah, that sounds like lovely use case for average users with higher than 0 chance of blackouts... Right timing bad design(sensible one) and it is all gone...
So in the end regular user probably ends up doing everything on centralized wallets or exchanges and then those are likely to do some off-chain book keeping as that is cheaper... Brining us back to banking...
