Desktop wallet

Quick definition

A desktop wallet is an application that you download to your computer and use to store and manage your cryptocurrency holdings.

Key details

• A desktop wallet offers a way to keep your cryptocurrency holdings secure through a piece of software on your computer
• Desktop wallets are typically more secure than online wallets, but less secure than hardware ones
• Desktop wallets may only be able to hold a limited number of crypto tokens

What is a desktop wallet

A crypto desktop wallet is a type of cryptocurrency wallet that you download and store on your computer. Once you have installed a desktop wallet, you’ll be able to access and transfer your cryptocurrency coins using the app’s user-friendly interface.

Are desktop wallets free?

Yes, desktop wallets are typically free to download. All you need to do is choose your preferred provider, download the software, and install it on your computer.

How do crypto desktop wallets work?

Desktop wallets usually have intuitive interfaces that make it easy for you to send and receive cryptocurrency tokens. Once you download and install the software, you can receive crypto by giving the sender your wallet address (which will be displayed in the desktop wallet), and you can pay them from the desktop app by entering theirs on the provided fields.

Your balance will be displayed in the wallet, as will your transaction history and wallet details.

Do I need to download any extra software to use a desktop wallet?

Usually the only software you’ll need is the wallet itself, which you can download from the provider’s website. However, for some desktop wallets you will also be required to download the blockchain data (the history of all transactions) for the coin(s) you’re holding in the wallet. This is done as a security feature so the wallet has less reliance on connecting to the internet to track the movement of coins.

Wallets such as Exodus and Electrum are lite/SPV (Simplified Payment Verification) wallets meaning that they don’t download the entire blockchain data to use them. However, others such as Bitcoin Core and Armory do rely on downloading the blockchain. Currently the size of the bitcoin blockchain is about 150GB, so this can take several hours to days, depending on the speed of your internet and computer.

Can desktop wallets hold multiple cryptocurrencies?

Yes, desktop wallets such as Exodus hold multiple cryptocurrencies. However, storage by such wallets is still largely limited to the biggest cryptocurrencies such as Bitcoin, Litecoin, and Ethereum.

Can I back up a desktop wallet?

Yes, you can back up your desktop wallet by noting down your ‘recovery seed’. Simply put, a recovery seed is a mnemonic phrase that allows you to restore a wallet when you’ve lost it or forgotten the keys. If your machine happens to get damaged or lost, you can use the 12, 18 or 24 phrases issued to restore your wallet.

It is important to do this as the wallet is stored on your computer, so if it gets lost/stolen or the file becomes corrupted you could lose access to your coins.

How are desktop wallets different to online wallets?

Online wallets are hosted on the internet, whereas desktop wallets are pieces of software installed on your computer. Think of it like this: a web wallet is like an online account protected by a password, whereas a desktop wallet is a programme saved and stored on a computer that uses the internet only when the owner wants it to.

On the technical side, the private key (necessary to access the wallet and transfer bitcoin from it) of a bitcoin desktop wallet is stored on your computer. This gives you control of your wallet information and makes desktop wallets more secure than online wallets, which store your wallet details on remote servers. However, your desktop wallet can be at risk if your computer is hacked or gets a virus.