There's good discussion of this feature here:

https://github.com/bitcoin/bitcoin/issues#issue/3

https://gist.github.com/803170

Issues:

 - Symmetric (aes) vs public key (rsa) encryption

 - Decrypt at startup vs decrypt on use

 - Create new keys automatically (as now) vs create only on user action

 - Encrypt all keys with same passphrase vs different passphrases for different key sets

One way to analyze these is via a threat model. What can the attacker do, that we will try to defend against? And what will we not defend against?

We can distinguish three levels of attacker:

1. Can read user files

2. Can read/write user files but only read system files

3. Can read/write everything, root privileges


Sorry, getting tired, will write more later.".