As a crypto investor, you already know how important it is to keep track of your investments.
So you can make buy or sell decisions quickly.
However, managing a crypto wallet can be a frustrating task.
As most wallets require you to enter your seed phrase, log in via password or passkey.
But you can simplify this thing by using a watch-only address.
So, what is a watch-only address in a crypto wallet?
Well, if you have not heard this term before, then here is a complete explanation:
What Is A Watch-Only Address In A Crypto Wallet?
A watch-only address in a cryptocurrency wallet is useful for anyone who wants to monitor their crypto portfolio quickly.
You can monitor a specific crypto wallet address through a watch-only address without entering private keys or going through any wallet security.
As a result, you can see all the transactions associated with that specific crypto address, including the incoming and outgoing transactions.
However, the wallet won’t let you make any transactions.
So, even if you share your watch-only crypto wallet address with anyone, they won’t be able to compromise the wallet or your funds.
Instead, you will still need to use your primary wallet to make a transaction.
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Key Features Of A Watch-Only Crypto Wallet
- Monitoring Purpose:
With a watch-only address, you can keep track of the transactions for monitoring or auditing purposes.
This also comes useful if you are an organization trying to promote transparency by letting your users or investors know about the funds it holds.
Watch-only addresses are not meant for making any crypto transactions.
As a result, it adds an extra layer of security.
So even if someone gains access to your crypto wallet that contains a watch-only address, they won’t compromise your digital assets.
Also, watch-only addresses are public addresses, which means anyone can see the balance and transactions of the wallet.
But, without having access to the private key, unauthorized users cannot move the funds.
Using a watch-only address can be super convenient for anyone looking for an easy way to manage their crypto funds.
You can import watch-only addresses to your mobile wallet and keep track of funds.
So even if you lose your phone or get compromised, your funds remain safe.
Also, most watch-only wallet apps allow you to import different crypto wallets under the same roof.
So, you don’t need to manage multiple wallet apps to monitor your portfolio.
- Multi-Signature Wallets:
Finally, a watch-only crypto wallet address can act as a multi-signature wallet since it allows you to monitor your funds and wallet’s activity.
However, when it comes to spending your funds, it will require multiple private keys.
How to Create a Watch-Only Crypto Wallet?
Having a watch-only crypto wallet can be extremely useful.
However, creating it can be challenging, especially if you do it for the first time.
As for a watch-only crypto wallet, the regular crypto wallet address won’t work.
Instead, you will need an extended public key.
A quick explanation of an extended public key or XPUB would be one that can be used to derive child public keys as part of an HD wallet.
However, not all crypto wallets require an XPUB address.
Instead, you can use a crypto deposit address available on your crypto exchange or the wallet you using.
But for currencies like Bitcoin, you will need an XPUB address.
Now the question is, how to create a watch-only crypto wallet?
Well, many mobile crypto wallet apps do the job.
However, the most trusted one would be Trust Wallet, a well-known smartphone crypto wallet app backed by Binance.
Also, Trust Wallet allows you to add multiple View-Only wallets along with regular crypto wallets.
So the app will come in handy, and here is how you can use Trust Wallet:
- First, download the Trust Wallet app on your iOS or Android device.
- Once downloaded, launch the app and click on Get Started.
- Next, click on Add existing wallet and create a passcode.
- After that, select View-only wallet.
- Over here, you must select the blockchain network your crypto wallet uses. For instance, you can select BNB Smart Chain.
- After that, copy and paste the BNB wallet address and click the Confirm button.
- That’s it. Your watch-only wallet is now added to your Trust Wallet.
Note: If you encounter an error while creating your view-only wallet, try using an XPUB address.
How Do I Get The Private Key Of A Watch-only Wallet?
There is no way to get the private keys of a watch-only wallet.
As mentioned earlier, watch-only wallets monitor your crypto assets only.
It cannot be used for making transactions.
Instead, you can import your XPUB address or the deposit address of your crypto wallet to Trust Wallet and set up your watch-only Wallet.
But what if you want to make a transaction?
In this case, you must log in to your main crypto wallet, where your funds are located.
However, if you have lost access to your main crypto wallet, there is no way to retrieve your funds unless you have access to your password or seed phrase.
Recommended Read: What is a crypto wallet?
Why Should You Use a Watch-Only Wallet?
A watch-only wallet helps you with additional security.
If you occasionally log in to your primary wallet using your private keys, there is a high risk of your wallet being compromised.
Instead, you can use a hardware wallet to give your crypto assets a haven disconnected from the internet.
While still being able to monitor your crypto assets through your phone or desktop.
You can track your crypto transactions and check your crypto portfolio, as watch-only wallets are in read-only mode.
Is Importing My Extended Public Key or Addresses into Apps or Programs Safe?
You may also fear while importing your extended public key to apps like Trust Wallet or any other one.
However, there is nothing to worry about.
Crypto wallets use two types of addresses – deposit and withdrawal addresses.
An extended public key falls under a crypto deposit address.
As a result, the address can only be used for depositing funds into your account and not withdraw it.
What Should I Be Aware of When Using Watch-Only Wallets?
Usually, there is nothing to worry about while using watch-only wallets.
Watch-only wallets can only display your main crypto wallet’s assets and transaction history.
However, to be safer, it is a good idea to only use the trusted wallet apps on your desktop and phone.
Along with that, you should also avoid using any app that might ask for the withdrawal address.
And you are the one providing the deposit address.
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So that was a quick explanation of what watch-only crypto wallets are.
Watch-only crypto wallets are good for monitoring crypto funds across PCs and phones.
Or when you want to share your crypto asset details with anyone else or make them public.
These wallets are not meant for making any transactions.
So, there is no harm in using such wallets.