What is BIP38 Encryption for Your Bitcoin Wallet ?

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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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Ofir Beigel

Owner at 99 Coins ltd.
Blogger and owner of 99Bitcoins. I've been dealing with Bitcoin since the beginning of 2013 and it taught me a lesson in finance that I couldn't get anywhere else on the planet. I'm not a techie, I don't understand "Hashes" and "Protocols", I designed this website with people like myself in mind. My expertise is online marketing and I've dedicated a large portion of 99Bitcoins to Bitcoin marketing.

9 Comments

  1. 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.

  2. Jordan Stewart on

    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?

  3. When I visited bit2factor.org 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?

  4. Eugene Campbell on

    I think that right now not many bitcoin wallet applications are actually able to import these BIP38 private keys – I’ve read somewhere that you need to then turn this to WIF format before you can see the balance. Is this true?

  5. WOW! Another thing to remember about bitcoins. It seems there are so many ways to protect your bitcoins that it’s hard to keep track of them all – thanks for trying to inform us ;)!

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