Newbie questions on wallet.dat encryption.

[athcnv]

Hi!

Q1: When people talk of encrypting the wallet.dat file, they mean encrypting the backup copy and not the original that bitcoin is using, don't they?
Q2: Is it possible to encrypt the wallet.dat which is currently in the bitcoin folder? Would bitcoin still work in that case?
Q3: Is it possible to encrypt the entire bitcoin folder? Would bitcoin still work?

Thanks in advance.

[AaronBarr]

A1: Encryption can be applied if you change the whole behaviour of the bitcoin software!
A2: No
A3: No

[willphase]

Hi!

Q1: When people talk of encrypting the wallet.dat file, they mean encrypting the backup copy and not the original that bitcoin is using, don't they?
Q2: Is it possible to encrypt the wallet.dat which is currently in the bitcoin folder? Would bitcoin still work in that case?
Q3: Is it possible to encrypt the entire bitcoin folder? Would bitcoin still work?

Thanks in advance.

1. There's quite a lot of talk recently about wallet encryption.  You might mean the effort to add private key encryption to the official bitcoin client (link) or you might mean people just saying you should store your wallet on an encrypted volume, or you might mean the talk about setting up a savings wallet, and sending your money to this wallet (stored on an encrypted usb stick).

2. You can encrypt the wallet, but then you would have to decrypt it every time you used it.  A better solution would be to store your wallet on an encrypted volume (e.g. truecrypt) then mount the volume each time you wished to use your bitcoin client and use the -datadir switch to specify the path on the encrypted volume.  However, this would not prevent an attacker from compromising your box while it was powered on with bitcoin loaded, and simply stealing your wallet from the encrypted volume.

3. Encrypting the bitcoin application and blockchain wouldn't do much, because there is no private data stored in there.

Will

[bitv]

You CAN encrypt the original wallet.dat, bitcoin folder or even your whole hard drive. You just have to decrypt it while you're running bitcoin, because Bitcoin client obviously can't read from or write to your encrypted file

[willphase]

A1: Encryption can be applied if you change the whole behaviour of the bitcoin software!
A2: No
A3: No

HBGary interested in bitcoin?

Will

[AaronBarr]

A1: Encryption can be applied if you change the whole behavior of the bitcoin software!
A2: No
A3: No

HBGary interested in bitcoin?

Will

For now!

[Agozyen]

 In what capacity is HBGary interested in Bitcoin?

[willphase]

not sure what scares me more... HBGary interested in bitcoin, or US Government interested in bitcoin.

Will

[Agozyen]

 Aaron Barr is no longer affiliated with HBGary, unless there is more to the story....

http://blogs.forbes.com/andygreenberg/2011/02/28/hbgary-federals-aaron-barr-resigns-after-anonymous-hack-scandal/

Care to elaborate Aaron Barr? Is this the real you?

[Synaesthesia]

Thanks for the answers in this thread. Exactly what I wanted to know.

[jasonstx]

I think someone posted something like this before but here is what I do.


I built a VM of base windows XP patched up

I installed bitcoin

I ran bitcoin

I shut down bitcoin

I copied the wallet.dat into a hidden trucrypt volume on my thumbdrive

I shut down and delete that VM

I email the trucrypt volume (I made mine 5mb) to my gmail and put it on my dropbox as well.

That gives me a receiving wallet address that is about as secure as you can get.

If I want to move money out of that account, I just do the same process again.

New VM

install bitcoin

let it update the chain

shut down bitcoin

decrypt my wallet.dat

start bitcoin

make my transfers

shut down bitcoin

delete the VM

no need to even update the wallet.dat file

It is a convoluted process but with VM snapshots just prior to installing bitcoin its relatively painless.

[beoswind]

I simply created 10 wallets and export private keys from each and print them on paper and put in safe place

In case wallet.dat file will be deleted or lost I can retrieve it from private key

Of course I store 10 wallets on separate HDD / USB sticks and switch off internet access when copied one of them to main system

So in worst case even if my main system will be hacked I only lost ONE of my wallet which is 10% of my money on it

If you are paranoid you can even deleted 10 wallets and retrieve each wallet when you need it and use Linux to reduce possibility of simple hack

Regards