Can you duplicate Bitcoins?

No. You cannot just duplicate your Bitcoins or any other cryptocurrency- even when you back them up.

Let’s say I copy my coin wallet to another computer and start using it there. What happens?

Your wallet only contains the ‘keys’ to transact with the coins. There are no coins stored on your hard drive. The ‘actual’ coins are held within the distributed blockchain. As long as you are the only one that has the private key, you are the only one that has the right (and ability) to spend the coins that are ‘stored’ at the blockchain.

Think of it as a book being the blockchain, and one page is a block. On one of the pages it says that you own 1 Bitcoin. Taking that as the ultimate truth, everyone then knows that you own that 1 bitcoin. Now imagine to open the book, and read it, you need a key. Well when you ‘own’ the coin, you hold a key to the book. It means you can prove ownership of the coin. But you don’t physically hold the coin.

In simple terms, you only ever hold the key. So at the end of the day, it doesn’t matter how many copies you create from the key.

Private Key for Bitcoin and other cryptocurrency

 

You could try hacking your wallet or the blockchain. Hypothetically speaking, say you did duplicate Bitcoin- created fraudulent coins- and had 10 times the coins you originally had. As soon as you try to spend the newly created coins, the transaction will be broadcast to the network. It would instantly reject as the newly found coins actually don’t exist in the public distributed ledger system.

Bitcoin works because every single (full) bitcoin client has a copy of the transaction history and verifies signatures. When a miner finds a mathematical solution to create the next block, they are rewarded a select number of bitcoin in the process as an incentive for their work. From that point on, all bitcoin is transferred by a cryptographic signature. It’s strictly a pass-it-on system. Your wallet really only contains keys to pass it on to the next person.

Your wallet software and wallet file only store what are called “private keys”. These private keys can be used with a one-way math formula to generate public keys. These public keys can be used with a one-way math formula to generate what are called “Bitcoin addresses”.

This is also a reason online wallets are deemed less safer than an offline wallet. Online wallets are managed and hosted by a centralised or third parties. So technically they have full access to those private keys.

Copying a wallet is like creating a duplicate key – think door key. Bitcoins are associated with private keys and copying the key just means there are more keys around- not the number of Bitcoins. So when you want to backup your Bitcoin, essentially you’re backing up the private and public keys that allow you to transact with the Bitcoin that you are the owner of.

This leads to the obvious statement- keep you wallet or private keys absolutely secure. Like a credit card number. Even if you have your credit card physically, someone only needs the credit card details to transact with. There are several ways to backup your wallet and private keys, but that’s for another article.

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