---
title: "Watch-Only Wallets: Tracking Funds Without Private Keys (PDF)"
url: "https://bip39-phrase.com/list-phrase/watch-only-wallets-tracking-funds-without-private-keys-2026-10-18/"
language: "en"
updated: "2026-10-18T00:00:00+00:00"
---

# Watch-Only Wallets: Tracking Funds Without Private Keys

A technical explanation of how watch-only wallets derive addresses, prepare PSBTs using extended public keys, and manage privacy risks.

PDF document · Published October 18, 2026 

[ Open the PDF (6 pages, 249 KB) ](/list-phrase/watch-only-wallets-tracking-funds-without-private-keys-2026-10-18-en.pdf) 

## Contents

1. Derivation Mechanics with Extended Public Keys
2. Extended Key Types and Descriptors
3. Transaction Construction and PSBTs
4. Information Exposure and Privacy Risks
5. FAQ
6. Sources

Keywords: 

watch-only wallet · xpub · BIP32 · PSBT · public key derivation

Topic: 

[Crypto Wallets: Hardware, Software and Multisig](/topics/wallets/)

## Guides on the same subject

- [Hot Wallet vs Cold Wallet: Differences and When to Use Each](/difference-hot-wallet-and-cold-wallet/)  
A hot wallet keeps its keys on an online device; a cold wallet keeps them offline. Speed, cost, risks and backups compared, and how to split funds between them.
- [xpub, ypub and zpub: Extended Public Keys Explained](/xpub-ypub-zpub/)  
What xpub, ypub and zpub mean: how an extended public key works, which address type each prefix stands for, how to convert them and why to keep them private.
- [BIP 32 Explained: Hierarchical Deterministic Wallets](/bip-32/)  
BIP 32 defines HD wallets: one seed derives a tree of keys via chain codes and hardened or normal steps, and an xpub makes addresses without private keys.

One of the documents in the [Seed Phrase PDF Archive](/list-phrase/), listed on [archive page 12](/list-phrase/12/).