As you use Bitcoin more and more you’ll likely amass wallets and hardware all over the place. Old ones, new ones, things you’ve upgraded to or hardware wallets that you’ve left behind *cough* Ledger *cough cough*. So today we’re going to help organize all this by describing a solid framework on how to manage your Bitcoin.
What This Article Is & Isn’t
To be clear, this article isn’t about how to securely store your bitcoin. We won’t be covering how to protect your private keys, whether you should use a hardware wallet or not (you should) or other such topics. If you’re looking for these types of guides, please see our other articles below:
- A Beginners Guide To Bitcoin Security
- How To Protect Your Bitcoin Private Key
- How To Protect Your Crypto: An Ultimate Guide
- Sparrow Wallet: Ultimate Quick Start
- How To Create A Multisig Wallet
Instead, this article is going to be about how to mentally and literally organize your Bitcoin finances in a broader sense. Specifically it will explain how to manage your Bitcoin wallets so that it allows for the best functionality, privacy and security.
For example, should you just have one single bitcoin wallet that everything goes in and out of? Should you have two? Ten? Should they all be software wallets? How much should you keep in each? How should your funds flow from one wallet to another?
These are the types of questions we’ll be investigating today and while they might sound complicated, their answers are actually quite obvious and intuitive. This is because it’s very similar to what most people do day to day with their fiat funds.
The Fiat Standard
If we asked you to describe how you manage your fiat wallets, it’d likely be something like:
- Wallet: I keep pocket change in my wallet with me, maybe a few coins, a $20 bill etc
- Local Bank: I have a bank account that has, maybe a few hundred to few thousand in it
- Retirement: I have a retirement account that has multiple thousands in it for the future
This is hopefully relatable, intuitive and normal to you.