How do you separate your everyday Bitcoin setup from long-term storage?

[kawetsriyanto]

Holding bitcoin for long or short term, we just need to keep our wallet safe and secure our seed phrase so our bitcoin will be protected in the wallet always.

Agree. Whether it is a short term holding or a long term holding, we must secure the key phrase properly. The point is to prevent from hackers and we also can easily access it again at any time.

Some people keep their bitcoin in exchanges since they will be using it term to term and it's easy to convert to fiat. And if you want to keep it for the long term, you can keep it in a strong wallet so that no one can get access to it.

What strong wallet do you mean? I guess you mean the non custodial wallets. It is always not recommended to store coins to exchange wallets for the long term holding. We have no control once we send the coins to exchange wallets. For the full-control, non custodial wallets will be the best option.

Everyone will have different opinions on how to set up their bitcoin, but for me, I just convert my coins to USDT in the exchange, turn it to fiat, and my bitcoin always stays safe in my wallet till I reach my target before selling it out.

Each person has their own way, it is pretty true. But you need to consider the most recommended way in holding coins.
If we want to convert it to fiats, it is no problem to send to exchange wallets and sell them. All people also do the same way for the withdrawal to bank accounts.

[moneystery]

...
Separating wallets is a must, considering that we don't need to expose our assets. Small amounts could be kept in centralised wallets while we take full charge of non-centralised wallets with large funds.

I agree with that. Exchanges should be treated as they function as a place to exchange your Bitcoin when you actually need to use them. It was never meant to be a place where you store your assets long-term. For that, a user should use a self-custody wallet where they have full control over their private keys and funds.
Because we never know what will happen with that exchange. It could go bankrupt or our account could get blocked. The best way to avoid that is by storing our assets in a self-custody wallet where you are not dependent on an exchange or anyone else to manage your assets.

[sunsilk]

The reason I keep it that simple is 2019. I photographed my seed phrase and the photo synced to Google Photos along with everything else on that phone. Someone worked out my email address and my phone number through social engineering, got my mobile operator to issue a copy of my SIM, and used it to reset my Google password. I heard about the Google account first. By the time I checked the wallet it was already empty.

And this is one reason why we don't picture our seed phrases, android phones are synced with google accounts that you log in on the device. And that's why when it's compromised, everything is visible to the hacker.

The part I underrated was the recovery on the account. My password was long and I felt fine about it, and none of that mattered once someone had a copy of my SIM, because password recovery went to SMS.

That is also why the setup I described stayed simple afterwards. What I changed was taking the phone number off as a way back into that account. A screenshot or a note that backs up ends up behind whatever recovery the account allows, and more wallets on top would not have done anything about that.

It looks simple to be honest and I did that also before. But there's the risk on that part and each way that we're trying to do as part of keeping our recovery phrases has it.

Although on this one in particular, if you're logged on to your phone with your gmail account which most if not all android devices has it.

That stores the record on the cloud and google gets the copy. While if you simply keep the phrase written on something you own as a hard copy, it's only you who knows it and wherever you put it.

[Karl_3000]

I agree with that. Exchanges should be treated as they function as a place to exchange your Bitcoin when you actually need to use them. It was never meant to be a place where you store your assets long-term. For that, a user should use a self-custody wallet where they have full control over their private keys and funds.
Because we never know what will happen with that exchange. It could go bankrupt or our account could get blocked. The best way to avoid that is by storing our assets in a self-custody wallet where you are not dependent on an exchange or anyone else to manage your assets.

Exchanges is the worst place that you can store you bitcoin. I use it for fiat to crypto and crypto to fiat transactions and I use itt for trading. Indo not use exchanges for any other thing. There are staking, earning and some other ways that the exchanges are using to let their customers keep money with them, but the APR are not with it for me and I prefer to just hodl on self-custody wallets.

But if you are planing for long term holding, it is better you get a cold wallet. I make myself one with Electrum and Unstoppable wallets on an offline device.

It is not good to have you bitcoin store on online wallet for long.

[BitcoinPak]

Mostly, the ideal way is to simply use a hardware wallet to keep your long-term funds and then use an online non-custodial wallet, such as Electrum, for regular use cases, but since after the recent attacks and all the hacks happening in the industry, mainly the coldcard incident which cost a lot of people all their bitcoins, people are now a bit scared to use hardware wallets as well, because they are afraid that if those people could lose their funds from a hardware wallet, they can lose theirs as well.

So as a solution for that, if someone doesn't want to use a hardware wallet and just wants to use non-custodial wallets that are online and can be used within your device, I would say it is much better that they simply use a separate device for that wallet where they will keep their funds for the long-term. That device shouldn't be used for anything else, and it should be kept completely private, no apps or games, no browsing or messaging or anything in general, just the wallet and that's it.

[Curious T]

Holding bitcoin for long or short term, we just need to keep our wallet safe and secure our seed phrase so our bitcoin will be protected in the wallet always. .

Exactly. No matter how long or where you hold your Bitcoin, you still need to protect your Bitcoin, and the only way you can do that is to protect your seed phrase, wallet and device. Even if you keep your bitcoin in a hardware wallet, you will still need to protect it. So just keeping the bitcoin in cold storage is not enough. What is the point of an air-gapped wallet if you're going to be careless with the seed phrase? It's good to keep your Bitcoin you plan to hold for the long term in a separate wallet. It could be in any form, whether hardware or software, but the rule is the same: keep the device, wallet and seed phrase safe and secure.

[Baki202]

Exactly. No matter how long or where you hold your Bitcoin, you still need to protect your Bitcoin, and the only way you can do that is to protect your seed phrase, wallet and device. Even if you keep your bitcoin in a hardware wallet, you will still need to protect it. So just keeping the bitcoin in cold storage is not enough. What is the point of an air-gapped wallet if you're going to be careless with the seed phrase? It's good to keep your Bitcoin you plan to hold for the long term in a separate wallet. It could be in any form, whether hardware or software, but the rule is the same: keep the device, wallet and seed phrase safe and secure.

The location where you store your Bitcoin is crucial because you purchased it with your money, and anything can happen to it. It is not even advisable to store anything in an exchange; instead, you should simply create a wallet and keep it there. Once there, you will need to keep an eye out for anyone who might steal it from you. You also need to keep your seed phrase secure, and people are still debating where to store or write their seed phrase because if they are mistakenly discovered by someone who knows what to do, you could be hacked.

It's also a good idea to store the Bitcoin you've been holding for a long time in a different wallet. After that, you'll need to find a place to keep your phone away from it. The next challenge will be learning how to avoid scammers and seed phrases because people are always a target, especially when you start holding Bitcoin. By doing this, you can ensure your security. You need to learn about how to keep your coin because when you start holding it becomes a culture you must practice and time without number they have mention reasons you should take your security seriously.

[Grace333]

keep most BTC in cold storage and only a small amount in a hot wallet for regular use.

For the online side, I also keep Bitcoin-related logins and sessions separate from my normal browsing. Sometimes I use separate browser profiles or an antidetect browser for that.

How far do you guys separate everything before it starts becoming overkill?

Talking about bitcoin storage, any bitcoin i know I would be using in a short term exchange or transaction I usually keep them in an exchange as it's easier for me to swap or do whatever I want even converting to fiat. But as for long term storage, they are most kept on a self custodial wallets, one which it's seed phrase is backed up offline. And there is no reason to mix either of this two bitcoins because it might cause you more than you are willing to loose, in ither to avoid those kind of mistakes I honestly advice to make them separate.

[goldkingcoiner]

keep most BTC in cold storage and only a small amount in a hot wallet for regular use.

For the online side, I also keep Bitcoin-related logins and sessions separate from my normal browsing. Sometimes I use separate browser profiles or an antidetect browser for that.

How far do you guys separate everything before it starts becoming overkill?

I would also recommend not hoarding all your coins in one wallet. Bitcoiners should diversify and spread thin the risks. Although the more wallets you make, the easier it becomes to lose one. So really overkill is a question of personal and subjective perspective. For example, I personally find that many of the safety tips on Bitcoin long-term storage is usually good advice, especially on this forum. It all depends on how far you are ready to go to protect your money.

If you only have 100 usd worth of coin, I doubt you will care much about cold wallets or safety tips. All a question of perspective.

[kawetsriyanto]

I would also recommend not hoarding all your coins in one wallet. Bitcoiners should diversify and spread thin the risks. Although the more wallets you make, the easier it becomes to lose one. So really overkill is a question of personal and subjective perspective. For example, I personally find that many of the safety tips on Bitcoin long-term storage is usually good advice, especially on this forum. It all depends on how far you are ready to go to protect your money.

Very agree. We shouldn't think to store all our Bitcoin into a single wallet. Although it is a cold wallet, it is better to have multiple wallets for some separated Bitcoins. Even we lost the data for accessing one or few of the wallets, we may still have some wallets that we still can access it. I also think it is quite recommended to store the data wallets in some separated places, too.

If you only have 100 usd worth of coin, I doubt you will care much about cold wallets or safety tips. All a question of perspective.

If the Bitcoin is only valued $100, we shouldn't be too worried about it. For some people, $100 may be just a small amount of money.  So, they have no problem to store it any where as long as it is quite safe place.

[Nightwatchmare]

...
Separating wallets is a must, considering that we don't need to expose our assets. Small amounts could be kept in centralised wallets while we take full charge of non-centralised wallets with large funds.

I agree with that. Exchanges should be treated as they function as a place to exchange your Bitcoin when you actually need to use them. It was never meant to be a place where you store your assets long-term. For that, a user should use a self-custody wallet where they have full control over their private keys and funds.
Because we never know what will happen with that exchange. It could go bankrupt or our account could get blocked. The best way to avoid that is by storing our assets in a self-custody wallet where you are not dependent on an exchange or anyone else to manage your assets.

Centralized exchanges is the worst place for storing Bitcoin or crypto for a very long time, i do store Bitcoin on centralized exchange for a long time because i can lose my Bitcoin either through bankrupt or hack and centralized exchange cannot refund my Bitcoin when either of this happens. Yes a self-custody wallet is the best place to store Bitcoin without having any worries because self-custody wallet is different from  centralized exchange it gives one full access and control of his Bitcoin, you can only lose your Bitcoin if you let a third-party see your wallet private key.

[Catenaccio]

Centralized exchanges is the worst place for storing Bitcoin or crypto for a very long time, i do store Bitcoin on a centralized exchange for a long time because i can lose my Bitcoin either through bankrupt or hack and a centralized exchange cannot refund my Bitcoin when either of this happens.

Do or do not?
Even you said you do not store your bitcoin on centralized exchange a long time, I doubt that you can do that well practically. Many people said that but they are trading on exchanges and leave their coins there a long time.

In addition, I reckon that after you funding your account, there is risk already, and it does not wait till a long time for risk to appear.

Yes a self-custody wallet is the best place to store Bitcoin without having any worries because self-custody wallet is different from a centralized exchange it gives one full access and control of his Bitcoin, you can only lose your Bitcoin if you let a third-party see your wallet private key.

Self custodial wallets or aka non custodial wallets are very good for long term storage, especially open source cold wallets.

It's not perfect as there are conditions to use self custodial wallets rightly. From choosing a good wallet, hot or cold, open source or close source, and good in seed or private key generation or not.

Like Coldcard, it's open source, cold wallet but it was hacked.

[Cookdata]

Very agree. We shouldn't think to store all our Bitcoin into a single wallet. Although it is a cold wallet, it is better to have multiple wallets for some separated Bitcoins. Even we lost the data for accessing one or few of the wallets, we may still have some wallets that we still can access it. I also think it is quite recommended to store the data wallets in some separated places, too.

There is this popular misconceptions of how Bitcoin is kept on wallet and the mixed up. First of all, you don't store Bitcoin, you technically lock it on public key hash and the utxo remain on data set waiting to be unlock or spent to another pubkey hash again and again.
The concept of wallet is to help you manage your Bitcoin, spend your Bitcoin when you like with your private keys or seed phrase. The wallet does not store your Bitcoin, they don't hold Bitcoin for you.

If the Bitcoin is only valued $100, we shouldn't be too worried about it. For some people, $100 may be just a small amount of money.  So, they have no problem to store it any where as long as it is quite safe place.

Investment is subjective but a common sense will tell you that $100 is too small to be looking for cold storage, a good cold storage should cost half of the amount of the Bitcoin you are holding, not impressed but then $100 is a good start if anyone want to hold. If you plan on doing DCA for long term, then I will advice you get one since you have a long vision for accumulation.

[lionheart78]

a good cold storage should cost half of the amount of the Bitcoin you are holding,

Are you saying that if a person holds 100 BTC, his cold storage should cost 50 BTC?  This is my personal opinion, and I think it sounds absurd.  It is not the cost of the cold storage to be considered here, but the security of our holding.  A DIY cold storage can possibly be more secure than a bought cold storage/hardware wallet because a self-made cold storage can't have a backdoor program that can sweep the BTC stored on it.

We cannot deny the possibility of a hardware company turning rogue by installing a backdoor script that can sweep our Bitcoin anytime.  So instead of relying on a produced hardware wallet by certain company, I always feel that it is safer to research how to securely create a cold storage.

[Cookdata]

I didn't expect this coming from you. I'm going to act like you didn't see $100 in my post so I will requote so you read what I wrote again.

Investment is subjective but a common sense will tell you that $100 is too small to be looking for cold storage, a good cold storage should cost half of the amount of the Bitcoin you are holding, not impressed but then $100 is a good start if anyone want to hold. If you plan on doing DCA for long term, then I will advice you get one since you have a long vision for accumulation.

a good cold storage should cost half of the amount of the Bitcoin you are holding,

Are you saying that if a person holds 100 BTC, his cold storage should cost 50 BTC?  This is my personal opinion, and I think it sounds absurd.  It is not the cost of the cold storage to be considered here, but the security of our holding.  A DIY cold storage can possibly be more secure than a bought cold storage/hardware wallet because a self-made cold storage can't have a backdoor program that can sweep the BTC stored on it.

We cannot deny the possibility of a hardware company turning rogue by installing a backdoor script that can sweep our Bitcoin anytime.  So instead of relying on a produced hardware wallet by certain company, I always feel that it is safer to research how to securely create a cold storage.

Now you quote a small phrase to suit your narrative, please do better.

[The funny mimi]

I don't actually have a dedicated wallet for daily spending, but if I had to, and considering P2P is still too expensive in terms of fees and the underlying price, my best option would probably be using a CEX keeping the weekly average under $50, since my country prohibits using cryptocurrency for transactions. (yep, this applies specifically to my situation).
For long-term storage, I still use a cold wallet, along with Electrum as a "watch-only" wallet.

That makes sense especially since the rules and fees are different depending on the country i am still learning about Bitcoin so I wanted to ask why do you prefer keeping your long term Bitcoin in a cold wallet and what makes Electrum useful as a watch-only wallet? I would really like to understand how these two work together.

[348Judah]

Don't have all your portfolio coins on the same wallet, separate them for your long time investment assets and also have the ones you may use for other purposes on a different wallet entirely, many don't know that the risk of having all your assets on a single wallet is high especially when there is an attempt to hack or scam you and something unexpectedly eventually happened and they have access to your wallet, you stand the risk of losing everything that when you have your assets on different wallet.

[Alpha Marine]

I would also recommend not hoarding all your coins in one wallet. Bitcoiners should diversify and spread thin the risks.

This should be common knowledge, but sadly, it's not
Sometimes I see people talk about how they have so many Bitcoin all in one wallet, and I wonder why they hold so much Bitcoin in one wallet. Even when people get hacked, I wonder why they left so much Bitcoin in one wallet. I saw a guy on Twitter who showed a screenshot of his wallet with over 50btc in it. It was a very long time ago. As at then, Bitcoin was around $50k.
It's more convenient to hold them in one wallet, but it's not safe. If something happens to that wallet, then all the money is gone.
Simply keeping bitcoin in a wallet you use regularly will help a lot. As long as you keep the device and seedphase secure, there will be no problem.
The Bitcoin you plan to hold can easily be in a different wallet that you don't use while the others are in wallets you use.

[Smartvirus]

I agree with that. Exchanges should be treated as they function as a place to exchange your Bitcoin when you actually need to use them. It was never meant to be a place where you store your assets long-term. For that, a user should use a self-custody wallet where they have full control over their private keys and funds.
Because we never know what will happen with that exchange. It could go bankrupt or our account could get blocked. The best way to avoid that is by storing our assets in a self-custody wallet where you are not dependent on an exchange or anyone else to manage your assets.

Exchanges going bankrupt! That would be the first I’ve heard because originally, they’ve got nothing to do with your money and the most they could have done is hold it for you, while allowing you to transact with it and they earn from the fees charged per transaction.

What plays out with exchanges is usually a case of mismanagement of funds and fraud.

Leaving your coins on an exchange would always remain a risky move and a bad idea. Still, when you’re trading, you always get tempted to leave it a while. Just be well aware of the risk involved in doing so and that you can loose it all.

[#CapsLOck]

An area that's often overlooked is the testing of the back-up itself. If multiple copies of a seed exist, but one of them is wrong, or you are unable to recover your wallet from it, it's not that helpful. That can be detected in a small recovery test before the backup is called for. To me, the differentiation wouldn't be between having so many different devices, rather, I would like to limit how many can reveal the long-term wallet. It's nice to have a spending wallet and the backup/signing process should be as easy and separate as possible.