Watch-only is a term used to describe wallets which do not store or use private keys. These wallets use only public keys, allowing them to show users their balances and receive bitcoin. However, since watch-only wallets do not store private keys, they cannot sign or spend any bitcoin.

A watch-only setup is optimal for cold storage, allowing users to keep track of their funds without exposing their private keys to the internet.

Related Terms

Public Key

A public key is used to receive bitcoin. When bitcoin is sent to a public key, only the owner of the corresponding private key will be able to spend it. 

Private Key

A private key is used to send bitcoin which was received by the corresponding public key. While a private key can generate a public key, the reverse is not true. 

Wallet

A wallet is a piece of software which generates and stores public and private keys, allowing users to send, receive, and store bitcoin. 

Cold Storage

Cold storage describes any method of storing data which does not connect to the internet or any other devices. A Cold wallet is a form of cold storage often used by bitcoiners to protect bitcoin which they do not plan on moving frequently. 

Extended Public Key (Xpub)

An extended public key, or xpub, is a public key which can be used to derive child public keys as part of a hierarchical deterministic wallet. 

Partially Signed Bitcoin Transactions (PSBT)

Partially Signed Bitcoin Transaction is a bitcoin standard which facilitates the portability of unsigned transactions. This allows multiple parties to easily sign the same transaction. 

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