Encrypting Bitcoin Wallets - Reading Assignment

  1. Why is it important to encrypt your wallet?

When wallet is encrypted and protected by passphrase, your coins are locked from being spent. Which means that even if an attacker gains access to the device on which your bitcoin wallet is running, he would not be able to do anything with the funds unless he has your passphrase.

  1. What is the risk of not having a password if an attacker gets access to your file system?

As soon as an attacker gains access to your file system, he would be able to spend coins from your bitcoin wallet instantly.

1-2. If someone get access to the wallet file they can see the private key and spend the funds within it instantly.

  1. Encrypting your wallet prevents hackers that have access to your file system from being able to access your coins
  2. The risk of not having a password is that your wallet is open and accessible by anyone who can access the file system of the computer that your wallet is installed on
  1. Because private keys to your wallet are stored in a data file that is, by default, not encrypted.
  2. High, If your system has been compromised and your private keys are not encrypted, your assets are there for the taking.
  1. It is important to encrypt your wallet in order to prevent anyone other than yourself from accessing your crypto (even if the file system is compromised the intruder can not access your private keys).

  2. The risk of not having a password is that then your crypto can be transferred without your knowledge because someone can access your private keys.

  1. So private keys are not kept unencrypted on your computer
  2. If they obtain your unencrypted private key they can spend your funds. Even if you have changed the password protecting your private key if the same key is protected by the original password history recovery functionality built into your computer could be used to compromise your key. Changing only your password is not sufficient to protect your funds, you must change the private key as well. Since the public key is derived from the private key, selecting a new public key for every transaction updates your private key as well. …(I think…)
  1. So the bad guys don’t get you crypto!
    2.If you Private key is unencrypted ( default condition) an attacker can potentially access your private key directly, in some cases, even if you have changed the password to an encrypted private key.

So that your money is safe and no one has access to your funds for transfering and or spending!

They have full access to your money

1.Why is it important to encrypt your wallet
Ans: prevent your data balance and TXs becoming vulnerable and available.
2.What is the risk of not having a password if an attacker gets access to your file system
Ans: your digital ownership of your Bitcoin if not encrypted is risk to no security or privacy, all data vulnerable and open to being accessed by attacker your balance and transactions

  1. Why is it important to encrypt your wallet?
    So that your BTC funds are protected in the wallet and safe from attack. (Like a Bank Vault)

  2. What is the risk of not having a password if an attacker gets access to your file system?
    If the attacker gains access to your file system they have the access to your private keys and then have the ability to steal your funds. (Like a bank Robber)

So nobody else than me can spend my Crypto Assets.

Than they can steal all may Crypto Funds.

  1. Why is it important to encrypt your wallet?
    Encrypting the wallet would add an extra security layer on the wallet, meaning a malicious person would need to decrypt the encryption and then she/he would be able to access wallet private details.

  2. What is the risk of not having a password if an attacker gets access to your file system?
    It would be very easy for the attacker to access the the wallet file folders and they might transfer the wallet.dat file onto their server/system.

  1. Otherwise your private keys and your BTC could be stolen.

  2. Same, you will likely loose your BTC

In order to protect your wallet in case the device gets hacked/stolen . With encryption (password) just you can have access to your wallet.

Your bitcoin could be be transferred/stolen.

1)to prevent hackers from stealing your private key.
2)Lossing all your funds in your wallet.

1. Why is it important to encrypt your wallet?
Without your password the hacker can’t acces your wallet.dat file.
2. What is the risk of not having a password if an attacker get access to your file system?
When the hacker get hold of your wallet.dat file, he can transfer your bitcoin.

  1. Why is it important to encrypt your wallet?

    tl;dr --> Protect your ASS-ets!

     If a wallet is NOT encrypted, then anyone who gains access to the wallet 
    

    will basically gain access to the data the wallet contains -

    both the ‘valuable’ actual bitcoin hash data, as well as the encryption key(s) data -

    and this will then give that party the ability to do whatever they wish, with that data -
    including steal-spend it, hack-destroy it, etc.

  2. What is the risk of not having a password if an attacker gets access to your file system?

     A pw can be considered a subset of the class of encryption, 
    

    so the same arguments apply as in the 1st question above.

  1. Why is it important to encrypt your wallet? Because it is not encrypted by default and if someone gets access to the device on which the wallet is held, they could also access your crypto funds.
  2. What is the risk of not having a password if an attacker gets access to your file system? An attacker could then steal your funds and you would not be able to do anything because they would be driving the lunar-compatible version of the high-end sports car of their choice. You will be stuck on earth watching them through a telescope, eating beans out of a can. Quite upsetting really.
  1. It is important to encrypt your wallet so that if someone gains access to your computer they are not able to access wallet.

  2. If the wallet is not password encrypted an attacker will be able to access the wallet and then spend the funds. i.e. steal your bitcoin.

answer is simple you can lose your funds