Need help encrypting

[BookofNick]

Hey all, seems the consensus is that backup wallet.dat files should be kept encrypted. I've never done this before, and am struggling. Here's what I've done so far:

- Downloaded truecrypt
- Created a "volume"
- Dragged and dropped my wallet.dat file inside my volume.

Now here's where I get confused. When I try to open the volume file on my comp, it gives me this string of gobblygook text. Is that my wallet.dat contents? If so, why didn't it ask for my password before I opened it?

I can also access wallet.dat through the TrueCrypt application, but when I try to open it it opens with EyeTV (a cable converter).

More questions:
- If I email the encrypted volume file containing wallet.dat, do I need truecrypt to open it on another computer?
- Assuming I can find the wallet.dat, how do I get the bitcoins onto the bitcoin application that sends/receives money? What if the bitcoin application already exists on that computer? Can you create another one? Or do the coins add on to the balance of the existing app?

It's all very confusing. I am impressed with those who see this stuff as second nature. HELP.

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[bitlotto]

Think of the file or volume as a virtual disk. The only way to open it is using truecrypt - no other way to open it. To open it you have to use the truecrypt application. By opening it you have access to contents. This file is totally encrypted. By using a file browser you can copy and paste files to and from this virtual disk and the encryption is done behind the scenes. "Mount" opens the file. "Dismount" closes it.

The wallet stores all your addresses that you use. Every so often back up the wallet TO the "virtual disk" or volume. If you need to restore the wallet you just copy it FROM the encrypted volume. As long as you use a secure password you can email or store the file (volume) anywhere without too much risk as it is all encrypted.

PM me if want. Or just ask here.

[BookofNick]

Ok, that answers my question regarding opening a file. But once I open the file, how do I get the coins onto my bitcoin client? Let's say my client holds 10 BTC, and I hold 20 BTC on my backup wallet.dat. How do I make my client see that I have 30 coins? Could I put a portion of my backup onto my client (I.e. Leave 15 coins on my backup wallet.dat so I have 15 coins on my client?

Or does it not work that way? Thanks for your help.

[bitlotto]

Wallets are just a way of accessing coins that are sent to specific addresses. Wallets doesn't actually store the coins but the addresses that are yours on the Bitcoin network. Each wallet has at least 100 addresses built in so your backup should last a while unless you are doing a lot of transactions.  If you are, you need to back up more. Say you have one wallet with addresses A,B,C and another with E,F,G. (Usually you just have one wallet that has MANY addresses. And use it for everything) If you had some BTC at address A you could send it to E then all your money would be in the E,F,G wallet. You can't merge wallets but you can send money to each wallet if your coins are split. By having the wallet file in the default location and running Bitcoin you can see how much BTC the wallet contains. Moving money around is all done in the Bitcoin client software.

[BookofNick]

Okay, so the bitcoins aren't stored on your wallet. It's more or less a password that confirms through the network that the coins are yours...I get that. What do I actually need to do when restoring? Do I replace the wallet.dat with the backup?

So I think I get this. Let's again say I have 10 bitcoins on my computer client and 20 bitcoins on my backup. I want to have all 30 of my bitcoins on my computer client. So I remove wallet.dat from my client and replace it with wallet.dat from my backup. I can then open the client and send those 20 coins to my original address which contains the 10 bitcoins. Then I remove the backup wallet.dat and replacement with the original. Right?

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If you do that, then the "backup" isn't a backup; it's a whole separate wallet.

[BookofNick]

Man, I must have one thick skull! 

Okay, so if I have 20 coins when I backup, spend 10, have 10 left, when I restore the network will see that I have 10 coins and that will appear in my balance.

And if I have 20 coins when I backup, gain 10, have 30, when I restore the network will see that I have 30 coins and that will appear in my balance?

[bitlotto]

Man, I must have one thick skull! 

Okay, so if I have 20 coins when I backup, spend 10, have 10 left, when I restore the network will see that I have 10 coins and that will appear in my balance.

And if I have 20 coins when I backup, gain 10, have 30, when I restore the network will see that I have 30 coins and that will appear in my balance?

Ok...The wallet contains "keys" to addresses. Think of the wallet as a key ring. Whenever people send you coins they go to an address on the network. You don't need to be connected. But now, to move, or spend those coins you need the keys for that address. That's what the wallet contains. If you back up the wallet with 30 coins then spend some when you restore the backup it will still say the lower amount because those addresses have less coins. The "keys" just tell Bitcoin where to look on the WHOLE network for what addresses are yours. People can send to your address when you are not connected. When you connect next time, Bitcoin will look up the addresses and see what amounts they contain...hope that helps!

Maybe my article at: http://bitcoinweekly.com/articles/how-bitcoin-security-works-by-analogy
will help.

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