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I'm really new to Bitcoin (just started today) so forgive me if this question has been asked before but I can't seem to find an answer on Google. From what I understand, the Bitcoin program is capable of encrypting your wallet for you. So, can I safely encrypt the wallet (using bitcoin-qt) then move it to my Dropbox folder and then symlink it so the program will access the copy in my Dropbox. I don't really want to lose my wallet.
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Yes, as long as you close the Bitcoin program first, you can copy the wallet.dat file anywhere you want to back it up. Just remember to keep it safe and use a password, and your Bitcoins will be safe. If you lose the wallet, you will lose the bitcoins you have in it forever (there is no option of recovery of lost bitcoins, unless you are talking about recovering lost files from your hard drive).
Erm, that wasn't what I meant. I meant enabling passcode encryption within Bitcoin-qt and then transferring the wallet.dat from application support (I use a mac) to my Dropbox folder. I then intended to use terminal to symlink it so that Bitcoin-qt will work off the dropbox copy. – Dr Coconut – 2012-08-25T12:58:02.237
Hmm, if you want to run your Bitcoin from the Dropbox folder, you can always start it with -datadir flag - https://en.bitcoin.it/wiki/Running_Bitcoin.
That also puts the blockchain there as well. A symlink will allow you to put the wallet and nothing else in Dropbox. – Stephen Gornick – 2012-08-29T15:41:35.290
The only thing encrypted are the private keys. Left unencrypted in the wallet.dat are the addresses and transactions. If you want those not revealed should your DropBox get compromised, you'll want to use TrueCrypt or something else. – Stephen Gornick – 2012-08-29T15:42:51.797