Money in your head - the concept of a Brainwallet

The wallet

Most Bitcoin users become quite familiar with their wallet. The wallet stores Bitcoins and can send out Bitcoins. As a a mental construction, the average non-tech user will assume that his 'Bitcoins' are actually stored in his Wallet, which itself is a computer program on his computer or mobile phone.

This familiarity is not surprising. The wallet controls the stash of Bitcoins so it seems as if the coins are located there. More tech-savy users know that Bitcoins are not actually in the wallet. Instead, so-called 'private key's' are stored in the wallet, whereas the Bitcoins are stored in the blockchain, a large file that is shared between all bitcoin users and which holds the entire history of Bitcoin transactions.

It's just keys

A better mental construction of the Bitcoin wallet is a pouch with keys. The keys give access to certain Bitcoins in the blockchain. With the proper key, a user can 'send' a Bitcoin from his address to another address.

How does the key fit to the lock (the Bitcoin address)? Well, here's where Bitcoin's safety features comes into play. The key and the lock belong to each other. Adding a Bitcoin address to the wallet leads to two things: 1. a public key (the visible Bitcoin address) and 2. a private key. The fun part is that the private key can generate the public key, but that it is nearly impossible to take someone's public key (his bitcoin address) and find out what its private key is. It's one way only.

Storage of keys

The keys are stored in in the wallet. The wallet can be a PC/Mac program, an app on a mobile or even an online wallet (for instance, at Someone who can access your wallet, may be able to take those keys. Most programs allow for an encrypted wallet secured by a password, but the keys (encrypted or not) remain there for a hacker to take.

Therefore, the presence of a wallet remains a liability. Anyone who can access the wallet with the private key, can try to take advantage thereof. Moreover, someone who wants to move to the other end of the world, must take his wallet with him. That could mean a very valuable laptop or USB stick to carry.

The brainwallet

That's where the concept of a brainwallet comes into play. A brain wallet is not actually a wallet. The wallet is never created in the sense that files of a computer program are generated. This is not what happens. A brain wallet is basically a passphrase. By means of a string of words that humans can understand, an algorithm creates a public Bitcoin address with the associated private key. The user gives input in the form of the passphrase, and the generator pops out public and private key. As long as the user remembers that passphrase, he will always be able to generate that Bitcoin address with private key over and over again. None of it has to be stored in a file and physically carried along. Once the Bitcoin address has been generated, coins can be send to that account, basically inaccessible for anyone other than the user that knows the passphrase.

Generate a brainwallet

Brainwallets can be generated only. The major website is For people that do not trust the online generator, it is possible to use an offline generator, such as BTC Puppy . This is a bootable Linux distro CD that let's you generate brainwallets without connection to the Internet. Just try it out and see how it actually works. Unfortunately, creation of brainwallets for coins other than Bitcoin is still very limited.

Use a strong passphrase

It is very important to use a strong passphrase for generating a brainwallet. In jargon, that means that the passphrase must have a high level of 'entropy'. This is another way of saying that your passphrase should be as chaotic as possible. This makes it harder for a hacker finding your brainwallet address by testing thousands of passphrases and checking the resulting Bitcoin address for funds. That means a very long passphrase with all kinds of non-human elements in it. That does not make it easy, because You will have to remember it for a long time. If this is not done, the brainwallet will eventually be found by a hacker and emptied.

Putting it back into the wallet

When the time comes to access the coins stored, the user generates the keys again with the passphrase and a brainwallet generator. Instructions to do this with the official Bitcoin client can be found here .

Bitcoin | Cryptocurrency | E-currency

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