Quote from: kokjo on June 11, 2012, 12:32:36 PM

no! the number is wrong, the entropy after 512 rounds of sha256, will be below 0, if its true. which is not good or insignificant. its a huge error.

a acceptable reduction would be around 10^-80 bits/round

sorry dude you did your math wrong.

Eh no, it doesn't work that way. Decreasing entropy from 256 bit to (256-0.5734)=255.4266 bit means a reduction by factor 255.4266/256 = 0.997760156250

0.997760156250⁵¹² ≈ 0.317243314 so after 512 rouds, about 31.7% or 81.2 bits of entropy remains.

FYI: the standard Bitcoin-Qt client applies many tens of thousands hashing rounds (or sometimes hundreds of thousands, depending on your cpu speed) to create the master key for wallet encryption. Well, rest assured, all wallets do not have the same master key