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What is BIP38 Encryption for Your Bitcoin Wallet ?

You may have heard the term BIP38 before , but what does it actually mean ?

BIP38 is basically a standard way to encrypt a Bitcoin private key with a password. So if someone finds your encrypted key he can’t decipher it without knowing the password.

BIP stands for Bitcoin Improvment Protocol – meaning if you have an idea to make Bitcoin better you can draft it up and if it’s accepted by the community they will start using it. So BIP38 is just the 38th proposal submitted to the Bitcoin Improvement Protocol which is currently adopted by Bitcoin users for protecting their private keys.

There are 2 ways you can use BIP38. The first is to encrypt an existing private key with a password.

The second way to use BIP38 is to let someone else create a private key for you and not allow them to spend your Bitcoins.  So if you buy a physical Bitcoin for example, you’ll notice they have a private key printed on them and the guy who created them knows that key. So having BIP38 allows the creation of these coins and still protect you from the seller’s ability to spend them.

Keep in mind that private keys encrypted with BIP38 will usually start with 6p instead of the usual 5j.

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15 comments on “What is BIP38 Encryption for Your Bitcoin Wallet ?”

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  1. Justine, Nigeria

    Hi, am blessed with this lesson, but how Will I access my paper wallet on net,and can I sell my Bitcoin on paper wallet?

    1. Hi Justine,

      Well, paper wallets are hard to use so I wouldn’t really recommend them to beginners, or even intermediate users. You can’t use a paper wallet on the net. You would have to transfer the coins held by the paper wallet to a digital wallet on your computer which is connected to the network. You would do so by importing or sweeping the private key stored on the paper wallet to the electronic wallet. You would also need your coins to be online in this way in order to sell them.

  2. This actually feels simple to me, and safe. Even if people know my private key, without knowing my passphrase they can’t do anything. So having a good passphrase is essential.

  3. I’ve seen a site that is already selling tearproof bip38 paper wallets – this is a good option since you don’t want to somehow accidentally tear it or get it wet (it’s also waterproof). And I guess it’s safe to buy one, right?

  4. When I visited they mentioned bitcoin escrow. What is this? If you already touched on this subject on your site can you give me a link to it?

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