A Desktop Wallet is a common type of crypto wallet used to securely store and manage your private keys on a computer hard drive.
That makes a desktop wallet simply software that you install on your desktop computer (or laptop), much like you install a mobile wallet app on your smartphone or tablet.
They’re super simple and easy to use and you don’t have to fumble around with switching between an offline status and then getting online to complete transactions.
Most desktop wallets live on a desktop computer (duh!), which is more than likely always connected to the Internet (double duh!) when it’s powered on. This typically makes desktop wallets hot wallets – always on and always connected! They hot, yo!
And more than likely, since you’re not dealing directly with a crypto exchange, the wallet is almost always non-custodial, meaning you (not a crypto exchange) are in complete control of your private keys and crypto holdings.
Custodial wallets, on the other hand, like you would find at a CEX like Kraken or FTX, put the control of your private keys in the hands of the company running the crypto exchange. In this case, that would be Kraken or FTX. Kraken, for example, gives you access to your crypto holdings through an online Kraken account or mobile app, but the login details you use (a username and password combination or fingerprint) aren’t your private keys. Kraken keeps and controls your private key on its network, making it responsible for its safekeeping.
How does a desktop wallet work?
It’s fairly straightforward when it comes to operating a desktop wallet. You interact with them very much the same way you would interact with other crypto wallet types.
After installing software, as with most other applications installed on your computer, you simply click the program’s icon on your desktop to launch the application. After signup, enter at least a password (and sometimes a username or 2FA credentials), and you’re in!
This is easy!
Your desktop wallet still gives you access to your private and public keys used to sign and execute transactions.
As is common with other wallet types, when receiving cryptocurrency the sender needs your public key.
When sending cryptocurrencies, you will need the address of the person you’re sending them to.
Pretty normal stuff.
So why choose a desktop wallet to store and manage your crypto holdings? What’s the big deal?
Well, for starters, they’re considered more secure than web-based wallets, since you can only access them from wherever your computer is located, and again, you control your private keys.
You also have the added benefit of quickly disconnecting your desktop wallet from the Internet and only connecting online when you absolutely have to. This reduces your exposure to hackers, malware, and viruses.
Top desktop wallets offer multi-currency support, supporting 250+ different digital assets.
Some desktop wallets let you exchange your cryptocurrencies for other cryptocurrencies directly from the software! How cool is that!
There’s no need to first transfer a balance of cryptocurrency to another wallet to trade it.
And desktop wallets like Atomic and Exodus also support staking directly from your wallet. Noice!
Since you’re dealing with a computer to get access to your desktop wallet software, you have to be vigilant with maintaining the security of and access to your device.
Unlike centralized exchange wallets, where your security is pretty much taken care of, it’s the complete opposite of desktop wallets.
Being connected to the Internet potentially exposes your device to viruses, spyware, malware, and hackers.
Along with keeping your username, password and 2FA credentials secure, you’ll also need to maintain your operating system updates, anti-virus program definitions, spyware and malware controls, firewall settings and other software application updates too.
That might be a tall order that you don’t want to have to deal with.