Cryptocurrency platforms are constantly developing and gaining more and more popularity at the moment. Most people know what the terms “bitcoin” and “cryptocurrency” mean. However, they might still wonder why people discard official government currencies and traditional payment options in favor of bitcoin and other cryptocurrency transactions and services. There are plenty of various reasons: cryptocurrency and bitcoin in particular is profitable, independent (decentralized), easy to use, safe, customer-friendly, and promising. Among the most popular cryptocurrencies are Bitcoin, Ethereum, Bitcoin Coin, Bitcoin Cash, Tether, Cardano, etc.
However, besides all the aforementioned perks, cryptocurrency systems have their own pitfalls: their independence means insecurity and lack of control. They are also notorious for their price volatility and lack of inherent value. Apart from reliable and safe crypto wallets, users may also encounter deceitful and fake trading systems. That’s why we are going to help cryptocurrency traders and investors realize what systems they can trust.
One way to find a reliable server is to search for the most popular wallets that have a large customer database. In this wallet review, we provide detailed information about the platform that has an established reputation on the Bitcoin wallet market – Electrum Wallet. You will learn about its pros and cons, history, installation procedure, mechanisms of its work, and other relevant issues.
A Bit of History
Before you learn about the features and options of this bitcoin wallet, it is better to get acquainted with the history of the Electrum platform and trace the development of this crypto server till the present moment.
Electrum is one of the oldest software (a.k.a desktop) wallets on the market, introduced at the end of 2011. The founder of the wallet, Thomas Voegtlin, was an innovator in the Bitcoin world. Voegtlin originally was a researcher in computer science. Still, his desire to create a wallet that would cater to all users’ needs made him drop his original topic of research and come up with ideas implemented in his best-known creation. Electrum is a product of his experimentation work. For the founder, it was crucial to creating an open-source server code so that various experts in crypto development could modify it and implement new effective technologies. Voegtlin started Electrum without revealing his identity as anonymity was an essential factor that prevented corruption.
However, later, he decided to distribute binaries himself and reveal his name to eliminate the risks of building malware by other editors and gain trust. Thomas realized that his interest in Bitcoin was much stronger than in his research, and that’s why he made up his mind to create the Electrum company and become an entrepreneur. Even when there were only two developers in the company, it received contributions from hundreds of people.
In the summer of 2019, Thomas introduced one of the biggest upgrades in the wallet. He announced that Electrum customers had become able to make payments using the Lightning network, an additional layer added to Bitcoin’s blockchain enabling participants to conduct bitcoin transactions without fees and delays. The long-awaited release took so much time as the providers of the wallet decided to write a completely new implementation of the protocol rather than use a popular version.
In version 4.0.2, Electrum Wallet providers introduced a watchtower system that helps to prevent users from fraud and suspicious activity to make the Lightning Network more secure.
Since the Electrum wallet was launched in 2011, the designers have implemented lots of different features (including hardware support) that make the wallet more secure and prevent users from hacker attacks. If you want to stay up-to-date and be informed about new releases, implementations, or progress made in solving phishing issues, start following the Electrum Wallet Twitter page. Keep in mind that you cannot get support on Twitter. If you have any questions, send them on bitcointalk.org, IRC, or Github.
The latest version of Electrum Wallet is 3.3.4. Those who develop the bitcoin wallet continue to create means of solving the phishing problem and correct mistakes in the code. That’s why make sure that you have an updated version of the platform. We recommend downloading it from the official Electrum Wallet website.
Now that you know how Electrum Wallet appeared and whom you can give credits for it, you can proceed to the next part of our wallet review, in which we create a general picture of what Electrum is.
As we have mentioned above, Electrum is a desktop wallet, which belongs to the hot wallets category (also including online and mobile platforms). Unlike paper and hardware wallets (also known as cold wallets), hot wallets are connected to the Internet, thus making it possible for hackers to get access to your private information. However, if you want to make purchases and spend your crypto money every day, it is better to store your bitcoins in hot wallets like Electrum. Also, unlike hardware wallets, Electrum is free.
Electrum does not require downloading the entire blockchain, so this type of wallet, as a rule, works much faster. The wallet requests the necessary blockchain information from a server.
The question “Can my private key be hacked?” concerns all bitcoin users. Electrum Wallet ensures password protection for private keys, which are used for signing a transaction. What proves Electrum security is that secret keys don’t leave your computer or some other digital device. The server has access neither to the private keys nor to the private user information. To keep it safe, don’t share your private key with anyone, even your closest relatives and friends.
Even if you haven’t written down your password on paper and let it slip your memory, there is always a chance to recover your wallet (not the password!). You can keep your wallet backed up with the help of a seed phrase, a list of twelve randomly chosen words. This seed mnemonic allows you to choose a new password. Losing or forgetting the seed phrase can lead to tragic consequences – the loss of your bitcoin money. After reading and confirming your seed phrase, you will get the warning, and the Electrum client will ask you to type your passphrase again in the blank box.
In the previous chapter, we mentioned hardware wallet integration. Besides two-factor authentication and multi-signature address, this new implementation adds another level of security to the wallet, therefore, placing it on the same shelf with cool wallets. Today, many popular hardware wallets on portable physical devices (Ledger, Trezor, Coldcard, and Keepkey) are compatible with the Electrum Wallet app and allow users to manage their Bitcoins and store their private keys in a more effective and secure way.
Features in Detail
Design is not the characteristic of primary importance for Electrum users. Many customers find Electrum Wallet the best choice for storing Bitcoins and making payments as it is rich in features. However, Electrum was easier to use during the first years as there were fewer features. Since many new features appeared, many users acknowledge that Electrum is a bit complicated to operate. Below are the options of the Electrum Wallet that you are to be aware of before you start working with it.
- Non-Trading Platform
What that means is that you can use Electrum Wallet only for spending and receiving coins. It is not possible to sell, trade, or buy them from within the Electrum storage. If you want to trade crypto values, the only way to do it is to send them to another wallet that supports the trading feature. This downside makes Electrum Wallet less convenient for crypto traders. It deters potential clients as nowadays, and many other modern platforms are designed not only for spending but also for trading cryptocurrencies.
- Two-Factor Authentication
Have you ever entered your phone number to get a passcode and verify a transaction or another action on the Internet? If the answer is yes, that means you have already dealt with two-factor authentication. Electrum Wallet allows you to create a 2FA wallet. 2FA is a service provided by TrustedCoin. Unlike a standard wallet that requires only your secret key, a 2FA wallet also demands entering a one-time generated password that is typically sent on your mobile device with the help of Google Authentication. When a QR code appears on the screen, scan it with the Google app.
Another useful Electrum feature is multi-signature. We recommend using this service only if you are experienced and aware of basic mechanisms of work and terms. A multi-signature wallet enables you to divide the power to manage bitcoin values between numerous wallets and people. If you want to create such a wallet, you need to choose the “multi-signature wallet” line in the install wizard window. Then, you are to choose your setup by specifying the number of signatures, or devices you’re dealing with, and the number of signatures required for confirming a transaction (does it remind you of something? Right! Multisig wallets can work with two-factor authentication – another way of keeping your coins safe). There will appear a warning in the Electrum window that says that you need a master public key (a.k.a, an MPK) for all your devices if you have to restore them from the backup. In the next step, you can create a new seed phrase for all your cosigners or choose another suggested option (for instance, to use an existing seed phrase for restoring). If necessary, encrypt your private keys with a password. Mind that you can create a multi-sig wallet at any time most convenient to you.
- Replace by Fee
Imagine that you are sending a certain amount of bitcoin to another user. After creating and signing the transaction, you have to get confirmation from the server. You wait, wait, wait…but get no confirmation. Unfortunately, it can take a long time (miners even might never include you in the block) due to low fees because miner nodes prefer verifying transactions with higher fees first. What should you do in such a situation? There are several options: 1) wait for the confirmation; 2) wait for the cancellation of the transaction; 2) increase the transaction fee (the RBF feature). So, the RBF is the replacement of the existing transaction by a new transaction with an increased fee. Easy, right? Electrum ensures that the server will add only one transaction into the blockchain and will not accuse you of double-spending (spending the same coins twice) as you will use the same address for the new transaction. When creating transactions, set higher transaction fees by using a slider to increase your chances to include the information about payments in the block
- Pay to Many
This option means that you can create a cumulative transaction and send coins to multiple users at once. It is a good way to avoid huge amounts of fees (total fee for individual transactions). All you need to do is to type each output (or wallet address) on the “Pay to” line and separate each bitcoin address by putting a comma.
In Electrum Wallet, you can use different addresses and label them for your convenience. There are two types of addresses: receiving (green) and change (yellow). Using a different bitcoin address for each incoming payment can help you increase the security of your wallet. Change bitcoin address is meant for delivering the change back to the wallet. Labels can be synchronized with other devices.
As you might have guessed already, Electrum is a Bitcoin Wallet. Although there are thousands of cryptocurrencies in existence, Electrum Wallet supports only one cryptocurrency – Bitcoin (BTC). We can divide bitcoins into one hundred millionths of their value. So, the name of the unit (or sub-unit) depends on the number of divisions.
There are four main bitcoins units:
- Bitcoin (BTC) – one whole unit of the currency (1.00000000
- Milibitcoins (mBTC) – 0.001 BTC
- Microbitcoins (bits or 100 sat) – 0.000001 BTC
- Satoshi (sat) – 0.00000001 BTC
However, there have appeared Electrum versions for Bitcoins forks: Bitcoin Cash (BCH), Litcoin (LTC), Dash, Bitcoin Gold (BTG), and other coins. Bitcoin Cash has split into two altcoins and created Bitcoin SV, which Electrum does not yet support. Focusing on only one currency enables Electrum to develop high-speed operations and provide it with efficiency. If you prefer to operate only with Bitcoin but cannot choose among different Bitcoin wallets, Electrum is one of the best recommendations.
To send coins click the “Send” tab, enter the receiving bitcoin address, specify the amount of BTC and the fee. To receive money, click the “Recieve” tab, input the bitcoin address, the sum, and the time, then click “Save.” An address can take the form of a QR symbol.
Electrum Customer Support
The main source of useful information that can help users to solve all their problems is the official Electrum website. By clicking the “Documentation” button in the website header and then clicking the link leading to official documentation, you will get to the webpage where you can visit the FAQs section or find relevant and exhaustive information about Electrum integrations and mechanisms of work. On the page, there are three sections: for beginners, advanced users, those interested in the Deamon tool, and even developers. We recommend visiting the webpage if you want to know the basics of Electrum, understand difficult terms used in the world of cryptocurrencies, or develop your skills as a bitcoin wallet user. The only customer support issue that you might face is that you cannot ask your own questions on the website and contact the providers directly.
However, Electrum Wallet offers you another online service where you can share your experience, concerns, and problems and get support from other people. We’re talking about Bitcointalk, a popular online forum focusing on discussion of bitcoin and other cryptocurrencies, wallet experience, and blockchain technology.
Another website that can assist you when difficulties arise is Reddit. The community on the Electrum subreddit is very helpful and supportive. There, you can inform others about failures in the system or ask relevant questions. Remember that all members should follow the community rules.
As we have mentioned earlier, you can also follow Electrum on Twitter to get the latest news but mind that it is not possible to ask questions in private messages. Turn on Twitter notifications to be informed about the latest updates within the service.
Although Electrum Wallet is one of the oldest wallets on the market, you will not find many detailed reviews on Electrum Wallet. One of the possible reasons is that this wallet is not the best choice for inexperienced users. Anyone who has just made an acquaintance with cryptocurrencies will not be able to make effective use of the services the wallet offers. Sometimes, it can result in negative comments. However, the majority of reviews existing on the Internet are positive, with an average rating of four stars out of five. The only major complaint was about hacker attacks. That’s why since the Electrum team found out about the problem, the company has constantly been working on improvements and fixing bugs in the software. The team recommends updating the wallet to make it less vulnerable.
The Setup Procedure
Although we think that Electrum Wallet will work best for advanced or technical users, the installation process is comprehensible even for those who’re taking their first steps in the crypto world. We’ve created a short guide on how to set up a program and create a wallet on Electrum. After finishing each step, click the “next” button.
- Download the setup file for your OS from the official source – electrum.org (available for Windows, Linux, Python, OSX, and Android).
- Open the file and follow the onscreen instructions.
- Once you’ve installed Electrum, open it.
- Choose the type of connection to servers.
- Enter the name of the wallet file storing your private keys.
- If you’re a new user, choose the “Create a New Wallet” option.
- Choose the type of your wallet (standard, 2FA, multi-sig, or hardware wallet).
- For a new wallet, select the “Create a New Seed” option.
- Choose the seed type (Legacy or Segwit).
- Write down a seed (a.k.a recovery) phrase (consists of 12 randomly chosen words) on paper.
- Check if you’ve written the seed words correctly and input the words in the box.
- Enter the password for your wallet twice (don’t use your date of birth or any other simple combination as a password!).
Another thing proving that this software wallet is not attractive for beginners is its design. It is very simple and straightforward. No bright pictures or eye-catching icons. Just a few tabs at the top of the Electrum window – History, Send, and Receive. It is quite easy to guess what each tab means.
At the bottom left corner of the window, you can observe your Bitcoin balance. At the bottom right corner, you can view four icons – the lock (password changing), the tools (system settings), the seed (the recovery phrase), and the circle. If the circle is green, it means you have connected to the server. If you click the circle, you will view the number of server nodes and their names.
Electrum is one of the most secure wallets (even though it is a software one!) that creates a safe environment where there is little chance for hacking or phishing. Although it is not a platform for storing a variety of cryptocurrencies, you can rest assured that this wallet has created a safe place for your bitcoins and offers the best services helping you to manage them. If you are a beginner in the cryptocurrency sphere, think twice whether you will be able to make use of all the options the software platform provides. Be ready for negative consequences if you don’t follow our recommendations (download the Electrum file only from an official Electrum website and guard your private keys and seed phrase with your life).
The Electrum team’s focus on functionality rather than design makes one draw attention to the most important things and control their funds without getting distracted by unnecessary features. Most people who have written reviews on Electrum recognize that it offers lots of options making the experience with cryptocurrencies enjoyable.
Let’s sum up all the pros and cons. Among the Electrum upsides are availability, simplicity, high-security standards, a variety of options, integration of popular hardware wallets. The downsides include single cryptocurrency support, unattractive interface, and occasional security breach (it is less secure than hardware wallets). Also, mind that Electrum is meant only for storing and spending rather than trading (buying or selling) cryptocurrency.
So, although the crypto world is developing with great speed, we recommend making reasonable spending decisions. Also, don’t rely entirely on your wallet; make sure that you have enough funds outside Electrum in case of some system failure. This recommendation applies to all bitcoin wallets and other platforms dealing with cryptocurrencies. We hope that while reading our wallet review, you have found useful information and lots of insights.
Is Electrum Wallet a good Bitcoin wallet?
Most people consider Electrum to be one of the best software bitcoin wallets. However, it has both advantages and drawbacks (see them above). Read our Electrum wallet review to find out whether or not this platform suits you.
Is Electrum Wallet safe?
Yes, Electrum is one of the most secure among hot wallets. The company uses high-security instruments such as two-factor authentication, the possibility to synchronize your wallet with hardware wallets (Ledger Nano, Trezor, etc.), private keys encryption, decentralization, and seed phrases. In our Electrum Wallet review, you can find more detailed information about these tools.
Does Electrum Wallet charge a fee?
To set up this software wallet, you don’t need to pay anything. Electrum only charges transaction fees when you make payments. Electrum calculates the number of transaction fees and allows you to custom them if you want either to slow down or accelerate the procedure of confirmation using a slider.
Does Electrum Wallet support Ethereum?
No. Electrum is a platform for a single cryptocurrency – Bitcoin. However, there have been new versions (like Electron Cash) created for altcoins such as Bitcoin Cash, Bitcoin Gold, etc. The Electrum company has not announced an intention to support any other fork.