How does the Bitcoin Standard Client wallet encryption work?

Question

I encrypted my wallet using Bitcoin QT, then closed the application. When I restarted Bitcoin QT, it did not ask for the passphrase. But I could still access the wallet.

How is it possible to access an encrypted wallet without the passphrase?

Does it save the passphrase somewhere?

What is the purpose of encrypting a wallet and not requiring the passphrase?

If you re-install Bitcoin QT do you need to enter the passphrase?

What if you transfer the wallet.dat file to another computer? Would you need the passphrase to access it?

Do you need the passphrase to access a backup of the wallet file?

Do you need the passphrase to access a copy of the wallet file?

I searched and did not find basic information about using Bitcoin QT. Is there documentation somewhere?

Answer 1

You only need the passphrase to do certain things like send bitcoins or change the passphrase.

The encryption itself is attached to the wallet.dat file which contains

• keypairs for each of your addresses
• transactions done from/to your addresses
• user preferences
• default key
• reserve keys
• accounts
• a version number
• Key pool

and if you ever want to switch your wallet or add the same wallet to a different computer, this is what you would actually be making a copy of. And because this is the file that's encrypted your passphrase will move along with it.

You do not need a password to make a copy of it, but making a copy of it, doesn't give you access to the coins. Unless your using a hosted wallet, then you need to make copy of your wallet yourself. Put them on a flash drive or another computer, or maybe even in a safety deposit box.

Answer 2

Only the private keys are encrypted, so the only time you need to enter a password is when you are generating new transactions, and I believe you have to enter the password to create new addresses as well.