Thanks for the walkthrough. It all makes sense, but this is the part that I'm stumbling on. If you encrypt the file with a strong password, where do I keep the password? It will clearly be just a string of characters. Using only words as an example would probably be something that could be cracked in days, and if you go with a 12 word password, well, you pretty much have your seed phrase right there! Anyone getting a hold of this USB drive would have ample time to work on cracking this password I imagine if its easy to remember. I imagine its a fairly simple process to run a script on an encrypted file and hope to guess the password for easy passwords. If the password is difficult, then its difficult to remember, and now that password also needs to be secured somehow. I actually like the fact that at least with the seed phrase, having a non digital recovery method is a huge benefit (ie. engraved on steel blanks). So if you need this DAT file, then you are still at the mercy of the electronic device working, even if you have multiple USB drives scattered all around. I came across a phrase from Andreas which was something like an elliptic curve with reference to security. Somehow the 12 word phrase was almost just as good as the 24 word one, and hence why Trezor went with 12 for the Model T. But mathematically, it just doesn't make sense to me. Saying all this though, I've read that the chances of a collision happening with regards to guessing a passphrase shouldn't happen for about 10,000 years, so this seems like almost good enough. I understand how using 12 or 24 words from a list of 2000 is something like 10^77 possible combinations, and perhaps there is room for more in a 256 bit encryption system which are addressable via the seed phrase but perhaps can be via a DAT file storing the private key, but its perhaps good enough for now. Also, having a seed phrase, and then using a secret passphrase to open a new, secret wallet seems like an excellent strategy that hardware wallet users can take advantage of. Sure, with your method you can have multiple DAT files, but then those files you clearly need to have backed up and they have to be somewhere. But being able to access a secret wallet built on top of your primary seed phrase seems very clever and excellent for thwarting many types of attacks if you are held hostage as an example. Nobody has to know you have this, and the passphrase can be simple enough to memorize so it doesn't have to be written down, and even if you write it down, it can be something that wouldn't even draw attention to it being this passphrase. With DAT files, you need those USB drives and you need to have access to those very complicated passwords.
Android (phone) Bitcoin wallets are SPV light wallets and require publicly accessible servers to access blockchain information
I think you should know that 12 or 24 word passphrase is the private key root derivation of the hardware wallet. Anyone with access to those words can take your coins anywhere they are in the world ---------- If you encrypt the *.DAT file with 24 words and email those words to yourself and CC all your friends in the world, none of them will have access to your coins. They need access to the *.DAT file not only the 24 words --------- But I'm talking about double encryption. In Bitcoin Core, you can password protect the *.DAT file. Then also encrypting the *.DAT file before saving it to an external storage