If your wallet software is connecting directly to Bitcoin Core, you are using Bitcoin Core’s wallet internally. ![]() This is the stage where you need true cold storage.Īlthough you have eliminated some privacy concerns by running your own node (or connecting to someone’s that you trust), others remain. The Expert StageĪt this stage, you are storing a appreciable percentage of your wealth in Bitcoin, where losing it might have a considerable impact on your future. However, while you are now transacting privately, you are not yet at the stage of true cold storage. Not only are you keeping your transactions private, but you are validating them yourself.Īnd, you are contributing to the health and decentralization of the Bitcoin network. Running your own node is a big step forward. Generally, the disk space requirement is the biggest hurdle, but be aware that you can run Bitcoin Core in pruned mode - see the guide for details. Once installed, go to the Sparrow Connect to Bitcoin Core guide to configure Sparrow to connect to it. You can download the software from and install it using the Running a Full Node guide. If this thought makes you uncomfortable, it’s time to consider running a Bitcoin Core node (or using one run by a person that you trust). The point at which that happens will vary depending on the jurisdiction you live in, but consider that you are sharing your balance and location via your IP address. Over time, the value of your Bitcoin investment will likely grow through additional purchases and price appreciation.Īs this happens, you should be aware that sharing your balance with public servers may be making you a target. While privacy is less important at these amounts, it’s a good time to start thinking about the implications of Bitcoin being a public ledger, and your balance being visible to the server you are connected to. You will likely be using a public server, or if you’re lucky, the node/server of a family member or friend.įollow the Quick Start guide to configure Sparrow for this stage. The hardware wallet should be stored securely along with a backup of the seed words (the latter ideally in a different location).Īt this level, it’s not necessary to run your own Bitcoin Core node. You will likely be using a Single Signature (singlesig) wallet with Sparrow, with the hardware wallet communicating with your computer through USB or perhaps QR codes. It’s unrealistic to expect this kind of usage to have the highest level of security - after all, you are a beginner.īut, it’s still important to take your coins off the exchange and use a hardware wallet or dedicated computer to store your private keys. It’s normal for beginners to start with small, non-life-changing amounts - perhaps a monthly salary. * No security is perfect, but these general descriptions apply. You should be able to recognise where you are on your own journey, and consider your approach accordingly. The following sections describe 3 common stages in a Bitcoiners journey. It’s important for the security of your Bitcoin storage to improve as well. Generally, this is a matter of time and the size of your investment.Īs your conviction in Bitcoin grows over time, so will the amount of money you invest. The best place to begin is to understand where you are on your Bitcoin journey. This guide is designed to help you consider not only how to use Sparrow safely, but also evaluate other wallets and approaches depending on your needs. The best way to do this is to educate yourself.īy investing time in understanding the tradeoffs of different approaches, you can greatly reduce your risk and improve your financial freedom. However, it is also a responsibility that needs to be taken seriously. ![]() Your wealth cannot be inflated away, taken from you with arbitrary regulations, or restricted to certain jurisdictions. Becoming financially self-sovereign by storing your own Bitcoin brings many advantages.
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