# rotki vs Koinly

> Koinly and rotki solve the same problem from opposite ends. Both connect to your exchanges and wallets, reconcile your trades and transfers, and produce portfolio views and tax reports. The difference is architectural: Koinly is a hosted cloud service, and rotki is a local-first desktop application.

Koinly and rotki solve the same problem from opposite ends. Both connect to your exchanges and wallets, reconcile your trades and transfers, and produce portfolio views and tax reports. The difference is architectural: Koinly is a hosted cloud service, and rotki is a local-first desktop application.

## How Koinly works

Koinly is a web application. You create an account, link your exchanges through API connections or file uploads, add your public wallet addresses, and Koinly imports that history into its servers. From there it builds your dashboard and generates tax reports, with broad coverage of country-specific forms. It runs in a browser and has a mobile app, but the cost of that convenience is that your complete financial history lives in someone else's cloud.

## How rotki works

rotki runs on your own computer. It connects to exchanges using read-only API keys and reads your on-chain activity through RPC endpoints you control, then stores everything in an encrypted local database. Nothing passes through rotki-operated servers. Because rotki is open source, you can read the code and verify exactly how your data is handled, rather than trusting a closed system.

## Privacy and ownership

This is the core reason to pick rotki. A hosted tool concentrates the transaction histories of many users in one place, which makes the vendor a target and means a single breach can expose a lot of people. With rotki, the blast radius of a problem is your own device. You are not handing your full financial history to a third party, and you are not depending on a vendor's data-retention or security practices.

## Tax reporting and DeFi

rotki produces accounting and tax reports locally, and it decodes on-chain activity into readable events so that DeFi positions, swaps, and rewards are accounted for with proper profit and loss. Koinly's strength is the breadth of its ready-made country reports; rotki's strength is doing the same core work without your data leaving your machine.

## The trade-off

rotki asks a little more of you than a hosted tool does: you run a desktop app and keep your own backups. What you get back is ownership. Your transaction history stays on your machine, encrypted and under your control, in software you can audit line by line. For anyone who cares about privacy and self-custody, that is a trade worth making, and it is the reason to choose rotki.