Desktop wallets: Holy War for bitcoin
A desktop wallet/local wallet is a software package you install on your computer. Local wallets are of two different types: full node wallets and lightweight/thin wallets. Depending on their types wallets vary in terms of safety and functionality.
What is the difference between a lightweight wallet and a full node wallet? Imagine a scientist reading about an experimental result and then repeating the experiment for herself. Doing so allows her to trust the result without having to trust the original scientists. © If you download the whole blockchain with your wallet and “repeat the experiment for yourself” you’ll run a full node client. If somebody else keeps the blockchain on their side for you you’ll just “read” about the experiment and keep it lightweight
The first bitcoin wallet was a full node client developed by Satoshi Nakamoto, the legendary creator of bitcoin and blockchain. The wallet is called Bitcoin Core (the Satoshi client) and is still considered one of the safest options in the market.
With a full node wallet you download the entire blockchain (>60 GB) on your computer and store it forever. (Blockchain basically is a journal in a shape of code that stores every transaction ever made)
Once your blockchain receives new information from the network it gets updated.
The full node checks every new block or every new transaction on the entire blockchain. If everything goes right your machine confirms information to the whole network, and so do gradually all the other clients — as powerful as yours. Now if a transaction or a block is not valid your computer says, no, there’s something wrong with it, and the suspicious node that sends bad transactions gets very quickly isolated.
Wootdango — with a full node wallet no-one can’t trick you into accepting fabricated transactions or hijacked block chains because your wallet is not so easy to trick. Indeed, you validate all transactions yourself! Yes, — with a full node client you don’t simply own a wallet, you are a verifier who takes part in the global process of money decentralization (a concept that helps avoid banks during the payments).
A thin client, though, is a program which connects to the bitcoin peer-to-peer (P2P) network but doesn’t fully validate transactions or blocks. © If you use lightweight/thin clients you use the third party software that helps you interact with the initial blockchain from time to time only.
Such an approach goes against the philosophy of money decentralization. Indeed, with a third party involved there’s always a chance for this third party to turn bitcoins into a object of profit or theft.
And yet, digital money is so much easier with a thin wallet! You don’t have to download all the blockchain to your computer (which sometimes might be a pain in the neck simply due to the lack of disk space). You don’t have to update the client all the time. Besides, thin HD wallets like Electrum let you keep your private keys, provide you with anonymity and guarantee a backup.
Are they less secure at least? Yes, those wallets are vulnerable if the network is overpowered by an attacker, Satoshi says in his white paper. But it is possible to verify payments without running a full network node. As such, this kind of verification is reliable as long as honest nodes control the network. So it’s up to you!
Here’s the funny thing, though. Before you go and download the whole blockchain to your machine make sure you have:
- 120 GB of disk space on the disk
- 2 GB of monthly bandwidth
- 4 GB of RAM
- 4-core CPU
achievement: made a concept of a cold storage come true
a full node wallet
one of the most secure bitcoin wallets available
private keys are generated and kept on offline machine
has issues with macs because none of the developers haven’t had macs to work on
a little bit difficult to install
you have to install the Satoshi client, too, to work with Armory
there’s only a few developers to support the project these days
achievement: one of the first lightweight wallets
Full control over fees
An offline version will hold your bitcoins
A watching-only online wallet will view its history and create transactions that have to be signed with the offline wallet before being broadcast on the online one
a lightweight wallet
no Electrum iOS app created