Detangling DeFi with Beancount

Cryptocurrency has given us a radically new way to think about money: decentralized, borderless, and programmable. Yet, with this innovation comes complexity. Between managing wallets, tracking trades, and calculating tax obligations, DeFi’s promise of financial freedom can quickly feel like a tangled mess. For me, the solution to managing this chaos lies in an unexpected place: Beancount, a plaintext double-entry accounting system.

Beancount is a simple yet powerful tool for tracking finances. Its plaintext format means my data is human-readable, portable, and free from the constraints of proprietary software. I can organize my financial records the way I want, without being forced into someone else's system. This is especially important when dealing with cryptocurrency, where transactions span multiple wallets, exchanges, and types of income like staking or mining.

Here's a relatively simple entry, a record of claiming the $ZING that HoloZing sends me for keeping my $ZING staked, and having bought an Alpha Vial.

2024-12-18 * "Income, Investment, HoloZingClaim"
  Assets:Digi:Hive:Michael561:Engine:ZING:Staked   19.435 ZING {0.04554 SWAPHIVE}
  Income:Investment:Crypto:Hive:HoloZing

The reason I’ve chosen Beancount is that it reflects the core values of cryptocurrency itself: transparency, sovereignty, and control. Every transaction I record is clear and verifiable, and because it’s stored in a plaintext file, I own my data completely. There’s no dependency on external services or tools—just a straightforward system that works.

Because Beancount uses plaintext, it’s easy to manipulate and integrate with other tools. There are existing scripts that can fetch real-time prices for crypto assets, template repetitive entries like staking rewards, and even validate your data for errors before they become a problem. Additionally, Beancount integrates seamlessly with Fava, a web-based UI that provides visualizations and insights into your finances. The combination of automation, error checking, and customization options makes it a powerful yet simple choice for managing crypto.

An unlabeled sunburst graph of my assets, as they show up in Fava.

Because it's not shiny and flashy, Beancount enables me the clarity I need to make sense of my crypto finances. It’s a system that aligns with the principles of decentralization, and for me, that makes all the difference.

Posted Using InLeo Alpha