There are several reasons why you might think having a single wallet to hold all your assets is fine. However, this is not advisable because blockchain technology is open for all to see. There’s no such thing as complete privacy when it comes to blockchain. Any random person could monitor your transactions and also your wallet activities. So, if you do not want undue attention, you should consider having your assets split across multiple wallets.
One of the most compelling examples is the wallet that had over 111,000 BTC stashed in it. Although the wallet owner stayed anonymous, several individuals and crypto analysts were able to stay on their toes, having known there was a wallet worth over $850 million at the time. Having this amount of bitcoin in a single wallet would require crypto recovery services if anything should happen to the wallet or the wallet seed phrases go missing. There are more than ten reasons why you shouldn’t store your bitcoin or assets in one wallet, and some of them include the following
Blockchain runs on an open-source technology:
As mentioned earlier, one of the most interesting facts about blockchain is that it is open source. It means that every activity carried out using blockchain technology is made available and accessible by anybody with working internet. However, this could be one of the disadvantages of whales using blockchain technology because their transactions are showcased for all to see. So, every transaction is recorded in an open-sourced ledger with the receipt available for all to scrutinize. If you have all your assets in one wallet, which means it isn’t private. The only privacy you have is your name isn’t recorded, neither is your photo. Nonetheless, your assets and crypto net worth are available for all to see. However, it’s advisable that you have multiple wallets and not just multiple wallets but also understand how to recover blockchain wallets peradventure you have issues with some of your wallets.
Risks of losing your private keys:
Besides your account being subjected to scrutiny and undue attention, you could also misplace your private keys. Losing a wallet’s private keys could be devastating, especially if the wallet is the only one you have, and it houses all your assets. This becomes worrisome because, at some point, anything could happen to your seed phrases or the private keys, and once you are unable to provide them, there’s no way to access your assets. By now, you should understand that cracking a cold wallet password without the seed phrase or the private key code is somewhat impossible. Hence, having all your coins in one wallet is a totally wrong call and should be avoided.
It attracts undue attention:
As stated earlier, 100% privacy in the crypto community is impossible, especially regarding transactions and recording of transactions. You can’t send bitcoin from one wallet to another without it first becoming registered. Once it’s registered, it becomes visible to everybody in the community, and anyone could proofread the transaction for transparency. Most whales do not always want the idea of their transactions recorded, although nothing can be done to the codes.
To cut the chase, having one crypto wallet to hold your assets is not advisable. Anything can happen to the code or even the wallet’s company, which could put your funds at risk. If you have most of your assets in one wallet, it may seem stress-free since you won’t need to move the coins from one wallet to another. However, it’s not always advisable to have your assets in a wallet. The crypto community is engaging, but you need to be cautious and take note of these little details. Storing your assets is as important as knowing when to buy and sell them. In fact, knowing which wallet to hold a particular coin is also essential. Ideally, some of the most famous networks are the Bitcoin network, Ethereum Network, Solana, Tron network, Smart chain, etc.
Hence, you might as well have different wallets to hold these networks separately. It is important to note that these wallets need to be kept safe and their recovery seed phrases. The crypto recovery services are not affordable to some investors, and if you know your portfolio is not as big as most whales, you should consider keeping your wallet’s private keys safe. You can have as many wallets as you want to on your PC or smartphone, so ensure you have as many as you can keep.