bitcoin/doc/README

Bitcoin 0.3.25 BETA

Copyright (c) 2009-2011 Bitcoin Developers
Distributed under the MIT/X11 software license, see the accompanying
file license.txt or http://www.opensource.org/licenses/mit-license.php.
This product includes software developed by the OpenSSL Project for use in
the OpenSSL Toolkit (http://www.openssl.org/).  This product includes
cryptographic software written by Eric Young (eay@cryptsoft.com).


Intro
-----
Bitcoin is a free open source peer-to-peer electronic cash system that is
completely decentralized, without the need for a central server or trusted
parties.  Users hold the crypto keys to their own money and transact directly
with each other, with the help of a P2P network to check for double-spending.


Setup
-----
Unpack the files into a directory and run:
 bin/32/bitcoin (GUI, 32-bit)
 bin/32/bitcoind (headless, 32-bit)
 bin/64/bitcoin (GUI, 64-bit)
 bin/64/bitcoind (headless, 64-bit)


Wallet Encryption
-----------------
Bitcoin supports native wallet encryption so that people who steal your
wallet file don't automatically get access to all of your Bitcoins.
In order to enable this feature, chose "Encrypt Wallet" from the
Options menu.  You will be prompted to enter a passphrase, which
will be used as the key to encrypt your wallet and will be needed
every time you wish to send Bitcoins.  If you lose this passphrase,
you will lose access to spend all of the bitcoins in your wallet,
no one, not even the Bitcoin developers can recover your Bitcoins.
This means you are responsible for your own security, store your
passphrase in a secure location and do not forget it.

Remember that the encryption built into bitcoin only encrypts the
actual keys which are required to send your bitcoins, not the full
wallet.  This means that someone who steals your wallet file will
be able to see all the addresses which belong to you, as well as the
relevant transactions, you are only protected from someone spending
your coins.

It is recommended that you backup your wallet file before you
encrypt your wallet.  To do this, close the Bitcoin client and
copy the wallet.dat file from ~/.bitcoin/ on Linux, /Users/(user
name)/Application Support/Bitcoin/ on Mac OSX, and %APPDATA%/Bitcoin/
on Windows (that is /Users/(user name)/AppData/Roaming/Bitcoin on
Windows Vista and 7 and /Documents and Settings/(user name)/Application
Data/Bitcoin on Windows XP).  Once you have copied that file to a
safe location, reopen the Bitcoin client and Encrypt your wallet.
If everything goes fine, delete the backup and enjoy your encrypted
wallet.  Note that once you encrypt your wallet, you will never be
able to go back to a version of the Bitcoin client older than 0.4.

Keep in mind that you are always responsible for your own security.
All it takes is a slightly more advanced wallet-stealing trojan which
installs a keylogger to steal your wallet passphrase as you enter it
in addition to your wallet file and you have lost all your Bitcoins.
Wallet encryption cannot keep you safe if you do not practice
good security, such as running up-to-date antivirus software, only
entering your wallet passphrase in the Bitcoin client and using the
same passphrase only as your wallet passphrase.


Technical details of wallet encryption
--------------------------------------
Wallet encryption uses AES-256-CBC to encrypt only the private keys
that are held in a wallet.  The keys are encrypted with a master key
which is entirely random.  This master key is then encrypted with
AES-256-CBC with a key derived from the passphrase using SHA512 and
OpenSSL's EVP_BytesToKey and a dynamic number of rounds determined by
the speed of the machine which does the initial encryption (and is
updated based on the speed of a computer which does a subsequent
passphrase change).  Although the underlying code supports multiple
encrypted copies of the same master key (and thus multiple passphrases)
the client does not yet have a method to add additional passphrases.

At runtime, the client loads the wallet as it normally would, however
the keystore stores the keys in encrypted form.  When the passphrase
is required (to top up keypool or send coins) it will either be queried
by a GUI prompt, or must first be entered with the walletpassphrase
RPC command.  This will change the wallet to "unlocked" state where the
unencrypted master key is stored in memory (in the case of GUI, only for
long enough to complete the requested operation, in RPC, for as long as
is specified by the second parameter to walletpassphrase).  The wallet is
then locked (or can be manually locked using the walletlock RPC command)
and the unencrypted master key is removed from memory.

Implementation details of wallet encryption
-------------------------------------------
When the wallet is locked, calls to sendtoaddress, sendfrom, sendmany,
and keypoolrefill will return Error -13: "Error: Please enter the wallet 
passphrase with walletpassphrase first."

When the wallet is unlocked, calls to walletpassphrase will fail.

When a wallet is encrypted, the passphrase is required to top up the
keypool, thus, if the passphrase is rarely entered, it is possible that
keypool might run out.  In this case, the default key will be used as the
target for payouts for mining, and calls to getnewaddress and getaccount
address will return an error.  In order to prevent such cases, the keypool
is automatically refilled when walletpassphrase is called with a correct
passphrase and when topupkeypool is called (while the wallet is unlocked).
Note that the keypool continues to be topped up on various occasions when
a new key from pool is used and the wallet is unlocked (or unencrypted).



See the documentation at the bitcoin wiki:
  https://en.bitcoin.it/wiki/Main_Page

... for help and more information.