, 2 years ago

Crypto 101: Desktop Wallet

Desktop wallets are the most common applications using cryptocurrencies. They enable you to send, receive and store crypto. What are the advantages using a desktop wallet and what are its limitations?

Thin Client vs Full Client

A thin client is a desktop wallet that will not load the whole blockchain onto your computer. Therefore, it will save you a lot of disk space when using such a client. The downside is trust. Most thin clients do not connect themselves directly to the network, but to a specific server. While those servers are considered to be secure, there remains always a little bit of doubt, because they act as single point of failure.

A full client is the classical wallet application. It loads the complete blockchain and takes a lot of space on your hard drive. In return you get the full control over your crypto, since the client will connect directly to the network.

Protecting your Crypto

No matter if you are using a thin or a full client you always need to protect your funds. You can do that by saving multiple copies of your “wallet.dat” (don’t forget to encrypt it with password protection first).

The second option makes use of so-called “Seed Phrases”. Such a phrase is a more or less easy to memorize and usually consists between 12 and 25 random words. With this phrase you’ll be able to restore your access on any computer using the same or similar software that supports the same standard.

That being said, you should keep your phrase in a secure place or even consider to store parts of it in different places.

Things to keep in mind

There is not THE killer app when it comes down to wallets. Its always a compromise between security, use case and convenience. With a desktop wallet you unleash the full power of a crypto.

On the other hand, you have to make plans in case you get hacked, your computer crashes or you loose access to your device. This comes with a lot of responsibilities and you need to make sure that you cover all angles.

Featured articles
Four trading strategies for crypto
Bitcoin and Ethereum: what are the differences?
What determines the Bitcoin price?
Related articles
How to take self-custody: own your coins

Dec 09, 2022

Unlike in traditional finance, in crypto you can truly own your money. Because whoever controls the cryptographic keys, controls the funds. That's a fundamental property and THE major benefit of crypto. If you don't have your keys, you don't really own your coins. If you deposit your coins on an exchange, you risk them going bankrupt. Instead, if you own the keys, then you are the custodian: we call that self-custody. How can you learn to take self-custody?

Trade anytime, anywhere

Boost your trading impact and reaction time in over 80+ cryptocurrencies via instant access to your portfolio with the LiteBit app.

  • 2525 Ventures B.V.
  • 3014 DA Rotterdam
  • The Netherlands
More info
  • About LiteBit
  • Careers
  • Support
  • Sell
  • News
  • Education
  • Affiliates
Subscribe for updates

Sign up to stay informed via our email updates

Subscribe
Explore popular coins
© 2023 LiteBit - All rights reserved