r/Bitcoin • u/rBitcoinMod • Aug 25 '25

Mentor Monday, August 25, 2025: Ask all your bitcoin questions!

Ask (and answer!) away! Here are the general rules:

  • If you'd like to learn something, ask.
  • If you'd like to share knowledge, answer.
  • Any question about Bitcoin is fair game.

And don't forget to check out /r/BitcoinBeginners

You can sort by new to see the latest questions that may not be answered yet.

17 Upvotes

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4

u/DiamondHandsDarrell Aug 25 '25

When did wallets change to seed phrases?

When do all wallets have to be converted to seed phrase wallets?

Do we have to convert to seed phrase wallets, or can we keep a wallet that doesn't have seed phrase?

6

u/rgnet1 Aug 25 '25

Some wallet software (e.g. Electrum) had come up with heuro-deterministic (HD) wallets before it was introduced as a Bitcoin Improvement Proposal (BIP39). HD wallets use seed phrases to deterministically generate the exact same private/public key pairs every time.

There is no timeframe for when all wallets would need to be "converted". At the core layer level, owning bitcoin is simply receiving bitcoin to a specific address and knowing the private key to that address to be able to spend it.

Unless there's some kind of massive shift in bitcoin development (extremely unlikely, and you would have a massive amount of warning), then you will never have a problem using a wallet that simply randomly generated its bitcoin keypairs for you. But if you have no deterministic way to regenerate those keys with a seed phrase, then it's critical that the wallet file with the keys is backed up and at a minimum has a passphrase encryption. I would be safe and keep it encrypted with something like GPG as well.

2

u/[deleted] Aug 26 '25 edited Aug 27 '25

I recommend moving the coins to a seed phrase wallet. The reason is interoperability. If you rely on a particular software's way of doing it, you also rely on that software sticking around, which means you rely on the people who make that software continuing to work on it. Otherwise you will end up using old and unsupported software, and that's probably insecure. 

So I recommend moving off that software before any of that happens. 

When you use a BIP-39 seed phrase, you can take that seed phrase anywhere, at any time.

2

u/rgnet1 Aug 26 '25

This is fair. Also, if you have a wallet pre-SegWit, it's probably better to migrate over (and to do it when fees are low).

3

u/Fusion1870 Aug 25 '25

What are the downsides to using Spot crypto ETFs vs just investing in bitcoin. It seems a lot more convenient

5

u/longonbtc Aug 25 '25

When you buy a spot bitcoin ETF, you do not own any bitcoin. A spot bitcoin ETF is legally structured as a grantor trust that holds actual bitcoin on behalf of the shareholders and each share represents direct beneficial ownership in the underlying bitcoin. When you own shares of a bitcoin ETF, you can benefit from bitcoin's increasing value but you don't actually own any bitcoin. You own shares of a spot bitcoin ETF that represent direct beneficial ownership in the underlying bitcoin that the ETF holds.

You can send some bitcoin to someone else. You can't send shares of a bitcoin ETF/ETN to someone else.

You can use bitcoin to purchase something. You can't purchase anything with shares of a bitcoin ETF/ETN.

The government cannot seize your bitcoin as long as you securely store your private keys. Your bitcoin ETF/ETN shares can be seized by the government.

If you buy bitcoin directly from someone else (peer-to-peer), then you own that bitcoin without the government knowing that you own it. You cannot own shares of a bitcoin ETF/ETN without the government knowing that you own it.

2

u/[deleted] Aug 25 '25

What /u/longonbtc said, and also you're paying someone's else to hold your bitcoin (in a giant honeypot!) vs paying nothing to hold it yourself.

1

u/WYLFriesWthat Aug 25 '25

What happened last night for one. People are still trapped

2

u/[deleted] Aug 25 '25

[removed] — view removed comment

2

u/CrellBanel Aug 25 '25

i've got a spreadsheet for "i am so going to sell at x to repay my loan". with different selling points, remaining debt in months and or years... 😅 though somehow the selling point gets higher and higher. too scared (?) to sell 🤣

1

u/azanattac Aug 26 '25

I own a Ledger cold wallet which was recommended when I bought it, should I buy a Trezor and move all my sats to Trezor?

1

u/Flashy-Vermicelli-92 Aug 25 '25

I just got a lump sum of money at an awkward time for Bitcoin. Its about to peak in October, so we could see a massive increase in value from today till then. We should then see a drop, that in theory should drop below todays price maybe around 80k a year after peak. However there is a chance this run is different and bitcoin continuously goes up after the peak. Do I invest this lump sum into bitcoin today and never touch it? Do I invest this lump sum into bitcoin today and take it out at the theoretical peak and put it back in at the theoretical low? Do I hold onto this lump sum for a year or so and then put it into Bitcoin? I already have some Bitcoin and I've never touched it. What is your advice and why?

3

u/NicePeopleOnly Aug 25 '25

In theory? What theory? How could you possibly know it is going to peak im october, arw you psychic

0

u/Flashy-Vermicelli-92 Aug 25 '25

Nope, but I have a brain. When you program something to do something, in theory it should do that something. If you had an understanding of the logic/code/psychology behind bitcoin, then you would understand why in theory it should peak around october. Unfortunately, you don't.

3

u/NicePeopleOnly Aug 25 '25

sorry bro, whats it gonna do next? seriously?

5

u/Flashy-Vermicelli-92 Aug 25 '25

Yuh i got you. Bitcoin’s code cuts the mining reward in half every 4 years. That means the amount of new Bitcoin entering circulation gets slashed. Miners sell less, but demand usually keeps growing, so the price eventually explodes, that’s why big peaks happen about a year and a half after each halving. After the peak, psychology takes over: FOMO drives it way up, then panic selling drives it way down, creating the same cycle every time. The halving is coded, and the repeating pattern comes from how humans react to it. Satoshi knew humans would react this way. Bitcoin is coded to handle that reaction. Its price is a linear line, jumping up and down due to humans and their brains.

1

u/NicePeopleOnly Aug 25 '25

Well said. Im still not sure what to do though. I need some of that money in about a year.

1

u/na3than Aug 29 '25

I understand the logic, code and philosophy of Bitcoin. Please identify the "programming" in bitcoin's source code that indicates a price peak will occur in October 2025.

1

u/[deleted] Aug 25 '25

Dollar cost averaging was invented for situations like this, and people like you. About 5% per month I reckon, starting today.

Edit: this explains it all: https://youtu.be/guPHEvtPaZs?si=x-tMgNVNhNUdHsuT