What is an Ethereum desktop wallet?
A desktop wallet is a piece of software that you can download and install onto your computer. After installation, you will be able to access and move your funds through the desktop application interface. It’s more secure than an online wallet as all the necessary information is stored on the computer rather than with a provider. However, your funds may be at risk if your computer is hacked or is infected by malware.
How do Ethereum desktop wallets work?
Desktop wallets have user-friendly interfaces designed to make it easy for users to transfer and receive ether. People can send you ether to your wallet address, and you can send ether to them from the desktop app by entering theirs. You can also view details such as your transaction history, balance, and more.
What other types of wallet are there?
There are four main alternative types of Ethereum wallets that you can consider. Here’s a summary of the differences between them:
- Online wallet. Also known as a web-based wallet, this is a wallet that allows you to access your ether via a web browser. The private key is usually hosted by your provider, and they are solely responsible for its security. Good examples of web-based Ethereum wallets are MyEtherWallet or Coinbase.
- Mobile wallet. This is similar to an online wallet, only that it’s stored on a native mobile phone application. Examples for mobile wallets include Jaxx, BRD, and Abra.
- Hardware wallet. This is an electronic device that’s specifically built to hold ether. It stores your private key completely offline, guaranteeing the maximum protection of your coins from online attacks. Some of the most widely-known manufacturers of these wallets include KeepKey, Trezor, and Ledger.
- Paper wallet. This is basically a piece of paper with both the private and public keys of ether addresses printed on it. Just like the hardware wallet, it keeps the ether completely offline, making it a great choice for those looking to hold their coins for long-term. Some of the best places that allow you to create a paper wallet include ETHAdress and WalletGenerator.
How are Ethereum desktop wallets different to online wallets?
Online Ethereum wallets are hosted on the internet, and your private key is encrypted by the provider and stored on their servers, meaning that they have the sole responsibility for its security. Desktop wallets, on the other hand, are stored on your computer’s hard drive and only connect to the internet when you want to make payments to another wallet. You don’t have to be online in order to receive ether to your wallet, as long as the sender has your wallet address.
Since the private key of a desktop wallet is stored on your PC, it’s your responsibility to keep it safe. If your computer is exposed to a malware virus or hacked when connected to the internet, your private key could be exposed and all ether on your wallet could become stolen.
What are the best Ethereum desktop wallet providers?
There are many Ethereum desktop wallet providers out there; and here are some of the best:
Created in 2011, this is one of the most popular wallets, best known for its advanced features, such as the ability to adjust transaction fees for speed. It even allows for integration with some hardware wallet, such as the Ledger Nano S and Trezor wallets.
This was one of the first desktop wallets to allow for its altcoin support. It comes with an easy-to-use, customisable interface making it a great option for beginners.
Launched in 2014, Jaxx works as a mobile and a desktop wallet, allowing you to hold, send, and receive over a dozen cryptocurrencies.
This is the official Ethereum client designed to allow the user to have full control of their funds. Unlike other options, Mist isn’t a third-party wallet.
Do I need to download any extra software?
No. You won’t need to download any extra software other than the desktop wallet app itself to get started.
Are Ethereum desktop wallets free?
Yes, desktop wallets are free to download. Just choose your preferred wallet, download its software to your computer, and install it to get started.
Are there any additional fees for desktop wallets?
No, but there are some fees associated with using Ethereum that aren’t charged by the wallet provider. When conducting transactions through your wallet, you might notice that you have incurred a small transaction fee (known as gas) for sending ether. These fees are used to reward miners who verify the transaction. The amount of the fees varies over time (typically they are under £1 worth of ether).
Some wallets such as Exodus will allow you to pay more or less ‘gas’ for each transaction. This is because paying more will incentivise miners to prioritise verifying your transaction and therefore lead to faster speeds.
Can desktop wallets hold multiple cryptocurrencies?
Yes, they can. Desktop wallets such as Jaxx and Exodus can hold multiple coins, but this is still largely limited to the biggest cryptocurrencies such as Ethereum, Litecoin, and Bitcoin. Many desktop wallets still only support a single cryptocurrency. For example, Armory only supports Bitcoin.
Can I back up an Ethereum desktop wallet?
Yes, it’s possible to backup your desktop wallet by simply writing down your ‘recovery seed’. This is basically a 12,18, or 24-word mnemonic phrase that allows you to restore your wallet if your computer is damaged or compromised, and you can’t access your wallet.
How to set up an Ethereum desktop wallet
Depending on the wallet you choose, the steps will be slightly different. However, the process is very simple and usually runs like this:
- Download the wallet software you have chosen from its website, or through the Google Play store and App Store, it is accessible as a mobile application. Make sure the software works for your operating system.
- Launch the downloaded file. Install the application to a preferred location, and open up the application once complete.
- Select the coins that you wish to have supported by creating wallets for them, i.e Ethereum (ETH).
- Once you have created a new wallet address, you should create a recovery passphrase. This passphrase should be stored in a safe place, preferably on a piece of paper. This can later be used to recover your funds on another device.
- Set up a PIN This is different from a recovery phrase, and works like a regular PIN associated with a credit or debit card. This can be a 4-digit code that you can use to confirm outgoing transactions that you make in the future.
- You can now transfer funds into your wallet, and in the future move funds out of it.
What are the risks of using an Ethereum desktop wallet?
Compared to online wallets, desktop wallets are very secure, but there are several risks involved, including:
- Being connected to the internet. If your wallet is on a computer connected to the internet, there’s always the risk of your computer being compromised by malware or hackers. Make sure to take precaution to stay away from websites that might infect your computer with viruses.
- Losing your desktop/laptop. If the computer where your wallet addresses are contained within is lost, damaged, or stolen, you will need to try to recover your funds on a separate device with a recovery seed. Try to keep your desktop/laptop safe, and prevent access from unwanted parties.
And what are the advantages?
Ethereum desktop wallets offer a perfect middle ground between hardware wallets and online wallets. There are several advantages, including:
- Ease of use. Desktop wallets are user-friendly and provide convenience to both new and intermediate users.
- Access to your funds on one device. The information of your wallet is stored on your computer, so when there’s no internet connection, the ether is secured offline all on one device.