What's in my wallet?

[Cred]

Techy newb question.

Am I right in thinking that what matters in terms of what you need to back up/not lose is just the set of private keys that go with the public keys under which you have received BTC?

I know you need the block chain to know the amounts to work out how much you own but can you recover your BTC so long as you have those private keys?

What else is stored in wallet.dat apart from those keys and the blockchain up to your last transaction, if anything?

[John (John K.)]

Wallet.dat only stores the private keys, the transaction log and the custom label that goes with it. The blockchain is stored in the blk0001.dat.

[Cred]

So do you need the transaction log to recover your BTC?

I was thinking of if you had your own secret way of generating key pairs you could recover them that way.

[DeathAndTaxes]

No.  The blockchain is the transaction log.

A way to think of it is you don't have any coins.  The coins are in the blockchain.  Every single coin ever mined and every coin that will be mined is in the blockchain.  The block chain is a consensus on where the coins are currently located.

It is like a digital version of the giant rai stones.


The stones were used for currency but they were never moved.  The consensus of villagers determined who owned it.  When one entered a transaction involving the stone everyone was notified and the consensus was updated.  Bitcoin works the same way.

You use private keys to move coins.
Private key = proof of ownership
Private key = ability to sign a tx and move a coin to a new address (spending coins is just moving coins from buyer to seller)
No private key = no move, coins lost "forever".

There are methods of regenerating private keys.  The term is a "deterministic wallet".  With the secret seed you can recreate the entire wallet because the keys and their sequence is always the same from the same "seed".  No need to backup anything but the secret and backup could mean recording it offline like on a sheet of paper.  The default client (also called the satoshi client) is not determistic.  You will need to routinely backup your wallet as it contains your private keys.  The wallet.dat contains other "stuff" which improves efficiency of the client but the private keys are what is important.  Everything else can be regenerated if you have the private keys and access to the blockchain.

[Cred]

OK. It's clear now.

I saw as your public key being like your bank account number and everyone can see from the block chain how much BTC there is in it, with the private key, as you say, enabling you to sign and transfer BTC to some other account.

I'm liking it. It's like capitalism in its purest form. Satoshi founded the 'company' with an idea then allowed anyone to become 'shareholders' or early investors (not just privileged 'accredited investors' in contrast to, say, Google) meaning they all have the incentive for it to be a success.

[z3rohour]

Very informational post