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.