The init-wallet-encryption command

zallet init-wallet-encryption prepares a Zallet wallet for storing key material securely.

The command currently takes no arguments (beyond the top-level flags on zallet itself). When run, Zallet will use the age encryption identity stored in a wallet’s datadir to initialize the wallet’s encryption keys. The encryption identity file name (or path) can be set with the keystore.encryption_identity config option.

WARNING: As of the latest Zallet alpha release (0.1.0-alpha.2), zallet requires the encryption identity file to already exist. You can generate one with rage.

Identity kinds

Zallet supports several kinds of age identities, and how zallet init-wallet-encryption interacts with the user depends on what kind is used:

Plain (unencrypted) age identity file

In this case, zallet init-wallet-encryption will run successfully without any user interaction.

The ability to spend funds in Zallet is directly tied to the capability to read the age identity file on disk. If Zallet is running, funds can be spent at any time.

Passphrase-encrypted identity file

In this case, zallet init-wallet-encryption will ask the user for the passphrase, decrypt the identity, and then use it to initialize the wallet’s encryption keys.

Starting Zallet requires the capability to read the identity file on disk, but spending funds additionally requires the passphrase. Zallet can be temporarily unlocked using the JSON-RPC method walletpassphrase, and locked with walletlock.

WARNING: it is currently difficult to use zallet rpc for unlocking a Zallet wallet: zallet rpc walletpassphrase PASSPHRASE will leak your passphrase into your terminal’s history.

Plugin identity file

age plugins will eventually be supported by zallet init-wallet-encryption, but currently are tricky to set up and require manual database editing.

Starting Zallet requires the capability to read the plugin identity file on disk. Then, each time a JSON-RPC method is called that requires access to specific key material, the plugin will be called to decrypt it, and Zallet will keep the key material in memory only as long as required to perform the operation. This can be used to control spend authority with an external device like a YubiKey (with age-plugin-yubikey) or a KMS.