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Is it really beneficial to put my bitcoin wallet on an encrypted disk (LUKS encrypted)?

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This only helps when someone malicious has physical access to you hard drive while your computer is not operational (shut down, account logged out, screen locked, etc.). When your operating system is running, an attacker running malware on your machine won't even notice your disk is encrypted.

Make sure your wallet is encrypted. That's much more important. Of course, having your disk encrypted has other benefits but as long as someone with physical access to your machine isn't trying to steal specifically your money, there is no advantage in this regard which would not already be there if you used an encrypted wallet. But the latter has the additional advantage that malware capable of reading your files can't just send your private keys to the attacker when you're using your computer and your files are available.

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  • I thought CPU usage and additional decryption time were relevant problems.
    – user123455
    Apr 3, 2017 at 9:28
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    For full disk encryption or home folder encryption, the additional CPU usage is relevant if you don't have hardware support for it. The additional CPU usage an encrypted wallet takes is completely negligible.
    – UTF-8
    Apr 3, 2017 at 9:58
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No. Store it in a secure location instead. Hard drives are like light bulbs - every time you turn one on, be ready to say goodbye.

Also, encryption is a double-edged sword. Yes, it will keep others without the passcode from accessing your drive. But a single bit error on the hard drive, in the hash, will render the entire drive unusable.

You are much safer to store your BTC at Coinbase. Go to their site and let them explain why - they will do a better job of it than I can, but I'll hit the high points below.

  • You cannot lose your BTC. They guarantee your deposits.

  • You can access them anywhere.

  • You can generate addresses for each transaction, and they are limited to that amount, so the transaction address can't be used to clean you out.

  • They are based in the USA.

[Disclaimer] I am biased because I have used them for years and am a very satisfied customer.

btw, you can always see what BTC is doing at either Coinbase Charts or CoinDesk Price

Remember, on the blockchain, each transaction has an ID number.

It is as if when you went to the bank or ATM they recorded the serial numbers of each bill, then as you spend them the serial numbers are recorded at Walmart or whatever. It is much more traceable than cash.

There is no advantage to trusting your own hard drive. Leave that part to the professionals.

Here is an example address:

Receive-only address

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