Traditional Bitcoin clients are software programs that you download onto your computer, allowing you to perform various transactions directly on your machine. These clients establish a direct connection with the Bitcoin network.
Advantages of traditional Bitcoin clients include:
Independence from External Services: These clients operate independently, relying solely on the Bitcoin blockchain itself without the need for external services.
Enhanced Privacy: By using different addresses for transactions, traditional Bitcoin clients offer the potential for increased privacy. Additionally, you can utilize Bitcoin tumblers to anonymize your coins, similar to using an exchange. While perfect anonymity cannot be guaranteed, having your own wallet grants you the freedom to take steps towards maximizing your privacy. Wallets like Armory and Multibit simplify privacy maintenance by allowing multiple wallets, ensuring that transactions between the wallets remain separate.
Convenient Wallet Storage: Your wallet is stored as a wallet.dat file, which can be easily backed up and stored on file-syncing services like Wuala or Dropbox. The standard Bitcoin client and Armory also offer the option to encrypt the wallet.dat file, minimizing the risk of losing your bitcoins if the file falls into the wrong hands.
Reduced Need for Trust: Traditional Bitcoin clients eliminate the need to trust third-party providers. However, it is still essential to verify the client software or trust that someone else has done so.
Despite these advantages, there are a few drawbacks to consider:
Management Effort: Using traditional Bitcoin clients requires more effort in terms of setup and ongoing management.
Blockchain Download Size: The wallet associated with these clients needs to download the entire Bitcoin blockchain, which currently stands at around 1 GB and continues to grow. Multibit, however, stores a smaller blockchain without transactions, reducing the storage size to approximately 20 MB. This approach makes importing keys and backing up wallets more challenging, as the client must retrieve information from the entire blockchain to determine which bitcoins are spent and unspent.
Limited Accessibility: Traditional Bitcoin clients limit wallet usage to a single computer. There are a couple of partial solutions available: keeping the wallet on a file-syncing service like Wuala or Dropbox allows access from multiple computers under your control, or backing up the wallet on your phone or USB key, although this method requires frequent updates and backups to avoid spending already-used bitcoins and encountering errors.
For desktop users, the three main options for traditional Bitcoin clients are the standard Bitcoin client, Armory, and Multibit. Mobile users can consider Andreas Schildbach's Bitcoin Wallet (for Android) or Bitpak (for iPhone, available on the standard App Store for $3.99).