Bitcoin wallet backup file

Disclaimer: I haven't done any of this, I don't know what I'm talking about. Some of what I'll be saying is from past readings about bitcoin, so I won't have good references to point at. This is written to address questions I was trying to answer but didn't find anything straight forward, so this may not go into as much detail as someone completely unfamiliar with bitcoin would need.I came across . Reading this makes me wonder, how do you backup your bitcoins.

One might think that the section on "Being careful with money" where he talks about backing up your bitcoin might answer the question. Well no, not completely. Instead it created more questions, "Important Note: if you use more than 100 Bitcoin addresses with your wallet, you will need to make a new backup file (the first backup will not know about the 101st address)." Let me step back and explain some things.

A Bitcoin wallet does not store bitcoin, in the same way your credit card does not store your credit balance or debit card stores your bank deposit. Instead bitcoins are stored in a peer-to-peer network. Where ownership is maintained by authorization to spend the bitcoin, this is what the wallet stores. The wallet provides you with the athority to spend coins you have been given, a transaction is then through the network where "bitcoin mining" is performed on your transaction, that is to say the peer-to-peer network validates those coins are in your ownership and then reassigns ownership to the new person. Saving this transaction in network of machines.