Watch-Only Wallet
A wallet containing only public keys or addresses, letting users monitor balances without the ability to spend.
A watch-only wallet contains public keys or extended public keys but no private keys. It can show you balances, track incoming transactions, generate receive addresses, and build unsigned transactions - but it can't actually sign or spend.
The standard pattern: a hardware wallet holds the private keys, and you load its xpub (extended public key) into a watch-only wallet on your laptop or phone. The watch-only wallet derives your receive and change addresses from that xpub, monitors them on-chain, and shows you the wallet state in real time. When you want to send, the watch-only wallet builds a PSBT and hands it to the hardware wallet to sign.
Why this split is useful:
- Daily monitoring without exposure. Your phone shows your wallet balance without your keys ever being on your phone.
- Auditing. Accountants, business partners, or auditors can verify on-chain activity for a wallet without needing spending access.
- Multisig coordination. Each cosigner can keep a watch-only view of the shared wallet while their actual keys live on isolated hardware.
- Backup verification. Restore an xpub on a different machine to confirm your addresses match - sanity-checking your backup without exposing your seed phrase.
Watch-only wallets are a standard feature, not a niche one. Bitcoin Core creates one when you make a wallet with private keys disabled, Electrum's cold storage guide walks through the same split, and the bitcoin.org developer guide describes pairing a signing-only wallet with a networked "watching-only" one as a normal wallet design. A common self-custody setup pairs a hardware wallet with a watch-only desktop or mobile companion - it's the cleanest separation between "knowing your balance" and "having the keys."
See Hardware Wallet for the signing-side device and PSBT for how watch-only and signing wallets actually exchange transactions.
Key takeaways
- Provides visibility of funds without spending capability
- Often uses xpub for derivation in HD setups
- Useful for security audits, custody oversight, or accounting
Related chapters
Sources (6)
- bitcoin.org - Developer Guide, Wallets: a networked (watching-only) wallet derives child public keys from a parent public key, monitors for outputs, builds unsigned transactions and hands them to a signing-only wallet (accessed 2026-10-13)
- BIP-32 - Hierarchical Deterministic Wallets, use case Audits: sharing account public extended keys lets an auditor see all transactions from and to the wallet, but not a single secret key (2012)
- Bitcoin Core - createwallet RPC, 29.0.0 docs: disable_private_keys, only watchonlys are possible in this mode
- Electrum - Cold Storage guide: an offline wallet plus a watching-only online wallet that views history and creates transactions to be signed offline (accessed 2026-10-13)
- BIP-174 - Partially Signed Bitcoin Transaction Format: lets offline signers such as air-gapped wallets and hardware wallets sign without direct access to the UTXO set (2017)
- Bitcoin Core - doc/descriptors.md, multisig: every participant creates a watch-only descriptor wallet from the same descriptor and checks they derive the same addresses (accessed 2026-10-13)
Related terms (9)
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