Among the PC wallets for Bitcoin-based cryptocurrencies such as BTC, BCH, LTC, DASH, SAFE, DOGE, and BTG, the most important file is wallet.dat.

wallet.dat is a BerkeleyDB database that stores key/value pairs.

wallet.dat contains the private keys for all addresses. When we transfer cryptocurrencies, these private keys are needed to sign the transaction.

These private keys must not be lost. Once lost, the coins can no longer be used by anyone and will disappear forever.

If you did not set a password in the above cryptocurrency PC wallets, the private keys in wallet.dat are stored in plain text. Anyone who obtains this file can transfer the cryptocurrencies. You can transfer coins, but so can a thief — if 100 people have it, all 100 can transfer coins; it just depends on who transfers first.

If you set a password in the above cryptocurrency PC wallets, the wallet will store all the private keys in wallet.dat in encrypted form. Data other than private keys remains in plain text. So setting a password does not encrypt the entire wallet.dat, only the private keys of each address.

If you backed up wallet.dat before setting a password and that backup is stolen, even though you now have a password, the thief has an unencrypted copy and can transfer the coins directly.

Anyone who gets your encrypted wallet.dat can open it using the corresponding cryptocurrency PC wallet, update the blockchain data, and see all addresses and balances. However, if there is a password, they cannot transfer coins.

If the password is too simple, it may be guessed or brute-forced, allowing coins to be transferred anyway.

If the password you set is long and complex enough—containing numbers, uppercase and lowercase letters, and special characters, with a length over 20 characters—the chance of it being cracked is extremely small.

In short, never give your wallet.dat to anyone, otherwise your coins will be in danger—unless it’s to a trustworthy person like me to recover your password ^-^

For beginners, keeping coins on a major exchange might be a better option, but it also comes with risks of the exchange running away or being liquidated.

Only by holding your private keys can you truly own your coins.

No your keys, No your coins. 

Keep SAFE, keep safe !!!