So if you lose your wallet file...

[Desolator]

Well, I didn't.  But that's bound to happen to someone at some point so I might as well ask.  I dunno much about the wallet/transaction side of the whole bitcoin system but basically if every copy of your wallet.dat file is destroyed and it contained coins, those coins are lost to the void forever, right?  Cuz the network has no idea you lost your wallet file and nobody can just claim those coins due to inactivity anyway, right?  And since the receiving address is the encrypted data and your wallet file is the decrypter, you sure aren't getting those coins back under your control without the wallet file! Let's say 5 years from now, someone might have a wallet that owns 10,000 bitcoins and that's like 25% of all their owned money (the rest is USD for example) and they're like most careless people these days who don't back up any of their data and their hard drive fries, well there goes all your money with it Seems like a bad idea.  Is there some sort of recourse for this situation that I don't know about?

[f0d]

good question - i would like to know this also
so if you lose your wallet file the bitcoins are lost forever in the system?

i can imagine some other bad things that could happen to this system

like a virus that targets the wallet file directly
or those online wallets that i only just found out about having their website crash or get hacked and lose all its info

[GoWest]

If you really want to ensure your wallet is safe, follow these directions: https://en.bitcoin.it/wiki/How_to_set_up_a_secure_offline_savings_wallet

You can achieve varying levels of safety/security by only following some of those steps.  At the very least, copy your wallet.dat to a USB stick, but I would recommend encrypting it first.

[molecular]

good question - i would like to know this also
so if you lose your wallet file the bitcoins are lost forever in the system?

yes.

why is this hard to believe? If there was a way to re-acquire the bitcoins, your bitcoins wouldn't be safe in the first place.

[f0d]

good question - i would like to know this also
so if you lose your wallet file the bitcoins are lost forever in the system?

yes.

why is this hard to believe? If there was a way to re-acquire the bitcoins, your bitcoins wouldn't be safe in the first place.

its not hard to believe at all

i just wanted to know how the system worked - it wasnt really clear to me that there was even a wallet "file" at all when i first started, i thought it was just the wallet address and now that i know how it works i just wanted to find out about the pro's and cons of the system

now i know about it i will be keeping my wallet file backed up multiple times to make sure i dont lose it

[Desolator]

someone posted really correct sounding logic about why backing up your wallet file is only half the story.  I should read that linked to article, I bet it's in there Something like every time a transaction happens to your wallet, sending or receiving, the wallet basically is deleted and regenerated so it's different and your old wallet backups are instantly invalidated.  Well that sucks.  But I'm thinking a future version of the client will be able to automatically save the wallet file to multiple locations every single time it's regenerated without you having to do it manually.  Until then, I have a super slick way of doing it with one click that I may post about.

Btw, if someone gets your wallet file, they have all they need to control the coins in it, right?  They don't actually need your wallet address or it's embedded in the wallet file itself or they can just generate another random one and attach it to that wallet file, correct?

[qwk]

Let's say 5 years from now, someone might have a wallet that owns 10,000 bitcoins and that's like 25% of all their owned money (the rest is USD for example) and they're like most careless people these days who don't back up any of their data and their hard drive fries, well there goes all your money with it

Let's say 5 years from now, someone might have a suitcase that contains 1,000,000 dollars and that's like 25% of all their owned money (the rest is bitcoin for example) and they're like most careless people these days who don't back up any of their cash in a bank vault and their wardrobe fries, well there goes all your money with it


A normally prudent person today doesn't store their money under the mattress anymore.
They go to a professional bank, open up a savings account, and deposit most of their money there.

Exactly the same will sooner or later be common with bitcoins.

[Desolator]

:O you mean there will be a bitcoin FDIC? lol that'd be awesome.  Of course, that'd require a strict list of who owns which wallet address but whatever.  Anonymity is great, it just isn't gonna work real well in this system but that'll sure prevent a lot of crime n stuff.

[The00Dustin]

Something like every time a transaction happens to your wallet, sending or receiving, the wallet basically is deleted and regenerated so it's different and your old wallet backups are instantly invalidated.  Well that sucks.

From everything I have read, I believe your wallet.dat file has ~100 more addreses ready to use, so your backup is good for ~50 transactions (apparently you typically use 2 addresses per transaction) before you start using addresses that don't exist in your backup.  It is certainly prudent to make a backup after every transaction, but if your computer smokes before you make a backup after generating your first new receiving address and having someone send some BTC to it, I believe restoring from your backup with the -rescan option will get you the BTC sent to that address.  That said, don't give someone else an old copy of your wallet because you think it's invalidated, or they might take some of your BTC (don't believe me?  send me your previous backup and we'll try it out, I don't really know for sure yet either )

EDIT:  See post #13 here: http://forum.bitcoin.org/index.php?topic=29450.msg370125#msg370125, and probably plenty of other resources if you search a couple places.

[The00Dustin]

:O you mean there will be a bitcoin FDIC? lol that'd be awesome.  Of course, that'd require a strict list of who owns which wallet address but whatever.  Anonymity is great, it just isn't gonna work real well in this system but that'll sure prevent a lot of crime n stuff.

I THINK bitcoin is specifically designed with NOT having that type of stuff be a part of it...  We don't need a new currency if the government is still going to control it, that accomplishes nothing.