Is it true that 'nothing in Bitcoin is actually encrypted'?

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4 Answers

Jonathan Cross, Learning and sharing what I know about privacy and security tools.

Answered 116w ago · Author has 91 answers and 207.5k answer views

As mentioned below, the Bitcoin network relies on many cryptographic primitives (hashing, signatures, random number generation, etc.) however it does not rely on encryption specifically to function. That being said, encryption (hiding information) is often used in conjunction with Bitcoin.

Some examples of where encryption is used to secure Bitcoin communications and private keys:

Bitcoin Core can encrypt the wallet.dat file which holds your private keys, thus preventing a casual attacker from stealing your bitcoins if they get that file but do not have the password.
BIP-38 Allows users to encrypt a so called “paper wallet” so that you can keep your private keys offline and isolated from computer-based attacks. Standard (unencrypted) paper wallets allow anyone holding the piece of paper to spend the bitcoins. BIP-38 requires both the piece of paper and a password to access the private key.
BIP-75 Uses encryption to hide payment invoice details and ensure only the parties involved in a transaction can see the details.
The new BIP-151 (not implemented yet) establishes a system to encrypt communication between nodes on the Bitcoin network to enhance transaction privacy for all.
Any situation where you are using https, TLS or SSL — you are using encryption. Examples: all web-wallets like Blockchain.info, payments through a payment processors like Coinbase or BitPay and most “light” wallets such as Mycelium, Electrum and Copay use TLS to communicate with a backend server.

So, technically, Bitcoin does not require encryption to function, but it would be very unsafe to use without encryption. Many bitcoins were stolen before encryption became commonly used in Bitcoin wallet software.

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Neil McAliece

Answered 209w ago

Bitcoin uses hashing and signatures. There is no encryption in the stored blockchain or p2p network protocol.

Private and public keys are used for address creation and these are stored in a file which is often named wallet.dat.

Each Bitcoin address uses a separate EC keypair.

This wallet.dat file is often encrypted to prevent the keys from being stolen, that's the only encryption that's used in Bitcoin.

There's plenty of cryptographic primitives being used : random number generation, hashing of keys through various algorithms to create the Bitcoin addresses and ECDSA signatures.

I believe this is where the confusion arises.

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Timothy Johnson, PhD student, Computer Science

Answered 216w ago · Author has 1.3k answers and 2.3m answer views

Each wallet in the Bitcoin protocol has a unique public/private key pair that is used to sign transactions. You can think of this as the digital equivalent of putting your signature on a check to make it valid. The advantage, however, is that a digital signature is probably impossible to forge.

Signing a transaction is the opposite of encryption. A signature can only be created by the person who owns the private key, but can be read by anyone using the public key. Encryption is used so that anyone can send a private message (encrypted using the intended recipient's public key), and no one else can read it.

So in a technical sense, you could say that only digital signatures are used, and there is no need to encrypt anything. But that would probably be misleading to anyone to doesn't understand the distinction.

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