Backing Up Keys vs Backing Up Wallet?

[chipmunkofdoom2]

Hi all. I'm registering and asking this question to get some of your opinions on backing up your Bitcoin wallet/key pairs.

Let me start out by saying that I understand how the private/public keys in wallets work. I understand that there is a separate key for each wallet address you have, and I understand that when you spend or send Bitcoins, some wallets like Bitcoin-QT will send your change to a separate address, usually out of 100 pre-generated addresses for change.

My big question is, would it be better to back up your entire wallet.dat file, or to create a paper wallet (or simple text document) and send your coins there, then back that up? I am not someone who is getting into Bitcoins to use them as a currency (shameful, I know). I'm probably going to mostly be buying, with maybe sending/selling every once in a while. In this scenario, I think it would make more sense to store my keys as a paper wallet, or as a simple text document in cold storage.

If I did want to send or spend some coins, I could then fire up my Bitcoin wallet of choice, import my keys to the wallet, perform whatever transactions I need to, then send all remaining funds to another paper wallet.

I have a few reasons for thinking this may be the best way to do things. The first is that if I ever wait a long period before sending or spending Bitcoins, such as a few years, it is possible that the wallet client I used is either a newer version that does not support my backed up wallet.dat, or that the client I used may not be available at all. It would be hard to imagine if I was unable to find any copy of Bitcoin QT at all in a few years time even under the worst of circumstances, but it's possible.

The second big reason is the flexibility of choice between wallets. Whether I'm using a freshly wiped Android phone, Macbook, Windows 7 computer, or Linux live CD, most of the wallets I've read about allow the import of key pairs. If all I have backed up is a wallet.dat file, it's not guaranteed that I would have any cross application or platform flexibility.

What are everyone's thoughts? For someone that only needs to send or spend Bitcoins once in a while, I can't help but feeling that importing my keys from paper, doing the spending/sending I need to, then sending the remaining balance to a paper wallet is the simplest and most secure way to do things.

Thanks in advance!

[DieJohnny]

This is one of my biggest issues when it comes to bitcoins, both for me short term and longer term in what it means to the Bitcoin economy.

If Bitcoin is the best value store long term (which it might be: tough to keep 100k in gold, real estate is far from liquid, stocks are a bubble and dollar based, cash is being devalued constantly), then how does someone that wants to keep 50% of their long term savings in bitcoin and feel comfortable about the public key/private key management problem. I have literally woken up at night worried I have mismanaged my keys!!

Some thoughts:

1. Printing your bitcoin wallet:

Pros: You have to steal it from me physically, I can make two copies and secure them both in safe deposit boxes or other physical protection, I can feasibly store all my wealth on a piece of paper
Cons: It can be destroyed, it can be stolen from me physically, it can be stolen from any place I want to put it, it can be forgotten, I can die and because of a bad will or stupid relatives it can get thrown in the trash.

2. Saving my wallet:

Pros: It is one file with all my keys, I can encrypt it and save it wherever and however I like
Cons: I can't manage any of my photos, how am i going to manage my wallet backups. You can inadvertently leave an unecrypted wallet laying around and you are screwed. Also, similar problems as paper wallet

3. Saving my keys:

Pros: I can easily use an online password application to protect my keys, or more than one if i worry about company longevity. I can print the key and save it like a paper wallet. I have fewer files to manage.
Cons: Too many copies of your keys in too many places, hard to track and more people/companies you have to trust.

So what I do:

1. I keep one printed wallet in a safe in my house and in a safe deposit at the bank. I hold this balance long term, no trading.
2. I keep two bitcoin addresses with small balances on blockchain.info. I trust the cloud wallet from blockchain, maybe I shouldn't.
3. I keep one public and private key in the most popular cloud password management app. This is also bitcoin i don't tap into unless I see a really good deal, and it holds a larger balance.
4. I keep bitcoin on mt gox, btc-e, cryptsy, and btc-38 and I only keep amounts I wouldn't cry over if I lost them all.

[BlockChainLottery]

I can imagine if it's a really big amount, it can keep you awake at nights.
What I would do is use an encrypted wallet file on two separate USB sticks, and store them in different places.
If you really worry about changing software, do not encrypt. That way it is always possible to extract keys from the file.

[chcointrader]

I personally prefer paper wallets
Easy to use and no risk to be hacked or destroyed by electrical events (thunderstorm...)
Paper wallets have the same risks like your dollars in your pocket (if you get them generated securely: www.safepaperwallet.com or a german one  www.securepaperwallet.de)

[DieJohnny]

The biggest problem i have with paper wallets is that for less than $1k I can deal with their value. Beyond that they scare me.

One major benefit of government backed currencies and banks? well my deposits are guaranteed.... The bank can go out of business and burn down but my cash at the bank is protected up to a very large amount.

Bitcoin needs something similar.

[Kloks]

As for the wallet You can make 2 wallets - one for everyday use and one for your savings.
Just keep it in the container like Truecrypt. Truecrypt has option to close containers if you forgot.
Make backups of this wallets on usb flash, DVD or magneto-optical disks and clouds.
I think backup of truecrypt container will be safer then only wallet.