Quote from: eramus on June 22, 2011, 08:24:18 AM

its not "bitcoin"'s responsibility to encrypt wallets. [.....] bitcoin is only a network for moving btc between two accounts.

It's helpful to keep bitcoin open all the time to see if transactions are coming in. If I do that, keeping the wallet inside an encrypted container doesn't help much, as others already explained. If you have a trojan with a keylogger it also doesn't help if bitcoin itself encrypts the file.

But I'd suggest that bitcoin separates the private keys out of the wallet.dat and keeps those encrypted. Because you need them only for sending coins. This way you can at least prevent people that have only temporary access to your computer (like physically walking in front of it) from stealing your coins and if some offsite-backup gets stolen your coins are safe even if you didn't encrypt it [1]! I don't want to argue if bitcoin is responsible or not, but I say if you are able to make it more secure, it really should be a priority task.

To sum up, i'd suggest that bitcoin should:
* Store the private keys encrypted on disk.
* Ask the user for the passphrase when coins are about to be sent.
* Delete (=overwrite) the keys and the passphrase in memory immediately after sending the transaction.

This would improve security a lot and can be only implemented in bitcoin. You can't do that as user.

[1] You should still encrypt it, because there is other information to be gained. Like how much money you have, where you got it from, etc.