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Bitcoin wallet encryption makes sure (by encrypting the private keys with a passphrase) that someone who finds your computer or your Dropbox or your backup drive (including wallet.dat) cannot spend your coins.

Does this also protect my receiving addresses (which I may not want to be associated with to protect my pseudonymity, and finding them in my wallet would remove plausible deniability)? And how about the aliases I have associated to sending addresses, which might breach confidentiality with my business partners?

If not, what additional steps do I need to take?

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Clearly your receiving addresses, your sending addresses and their associated aliases are readily available without the passphrase to your wallet as they are visible upon opening the Bitcoin client without entering the passphrase.

It's perhaps also worth noting that even if your wallet is encrypted, a successful attacker who has a copy of your wallet could install a keystroke logger to obtain your passphrase.

This would seem more likely to happen when your computer is compromised through installing a trojan etc than if someone physically found say a lost notebook PC (for which the attacker would need to install the keystroke-logging software & remote access software, and then give you your computer back so you would type in the passphrase next time you wanted to send coins!)

Sorry, I don't know where the sending and receiving address descriptions are stored, so I don't know how to protect them - hopefully someone else can answer that.

  • Updated the question to show that people can find wallet.dat without getting to the computer itself. +1 for pointing that out. – Thilo Dec 6 '11 at 2:13
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    They are stored in wallet.dat, so putting that file in a Truecrypt volume could be a step towards securing them. – Meni Rosenfeld Dec 6 '11 at 6:04

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