The Armory wallet is a software wallet. This is the “Swiss army knife” of Bitcoin wallets. It has a huge number of features for the advanced user. It has 3 modes: “standard,” “advanced,” and “expert” so new users are not confused by all the options. If you want to learn about Bitcoin transactions and how wallets work going through the Armory options is a great tutorial. It has versions for Windows, Linux, Mac, and even RaspberryPi!
This was the original “cold wallet” solution. The wallet can be run on a computer never connected to the Internet (like an old laptop) and the offline computer has the capability to authorize or “sign” a transaction. The online computer has a “watch-only” version of the wallet so it can receive funds but funds cannot be stolen.
Armory is a “full node” wallet. This means Armory runs with the full Bitcoin software. This means you must download the full Bitcoin blockchain. Then Armory creates a database and all this can take awhile. However, it is a stand-alone system and all transactions and balances are calculated locally and there is no dependence on a company.
Armory was also the first to use the “deterministic key.” This means that all you need is one code and all then addresses the wallet will ever use can be regenerated from the one key. Armory has extensive directions to set up your backup and test it. Paper backups and remote backups should be used. This is a stand-alone system and nobody can recover a lost wallet.
More recently Armory has added “lockboxes” which are “multi-signature” wallets. These wallets need an extra password in order to authorized a transaction.
Another privacy feature they offer is “coin control.” A Bitcoin wallet is actually a collection of many addresses. If payments happen to combine payment from different addresses they could be linked together and they could reduce privacy depending on the specific circumstances. “Coin Control” lets the user choice which addresses are used to send funds.
Armory is currently free but its future is unclear. About $1 million was spent on development and it appears it will be a paid product in the future. The free version may continue on but no official announcement has been made yet.