Electrum Wallet Website
- Ease of useUpperIntermediate
- Supported Coins
Pros & Cons
- Fairly high security.
- Extremely lightweight program that can run on very old computers.
- Includes a cold-storage cryptocurrency solution.
- You have complete access to your own private key and seed key.
- Versatile application runs on desktop, mobile phones, and even the command line.
- Electrum supports only a very short list of cryptocurrencies – including Bitcoin, Litecoin, and Stratis.
- The visual user interface is not intuitive and contains no graphics to make it easier to use.
- The help documentation is written in language that requires fairly high computer literacy to comprehend and implement.
- The procedure to implement cold storage is complicated, much more than buying a hardware wallet like Ledger or Trezor.
- Thomas Voegtlin
- Private Keys Stored by
- Medium to good, depending on user skill
- What it is
Three different desktop applications for three different wallets (that use different currencies).
Development on Electrum began in 2011. It is designed to be an extremely lightweight wallet. It comes in three applications – one for Bitcoin, one for Litecoin, and one for Stratis. It can be used on desktop, mobile phones, and it can even be controlled through a command line. With this kind of technology it is clear that Electrum is meant to appeal to people with very high computer literacy.
As stated above, I am completely responsible both for managing my own private key and for backing up my passwords. Electrum cannot recover my cryptocurrency and it cannot freeze my account if my key is compromised or lost.
Recently, a security bug was found in Electrum, so the software has been patched to prevent this vulnerability. If you use Electrum, make completely sure that you download version 3.0.5 or later.
Electrum features both two-factor authentication and multisignature authorisation, both of which are good security features. Its two-factor authentication relies on a remote server to co-sign transactions, so that even if my computer or mobile device is compromised, my funds will not be stolen in this way. Multisignature authentication can be enabled, which means that multiple wallets have to sign a transaction in order for it to go through. This way, even if one of my private keys is compromised, anyone who has stolen it will need the other wallet key as well to steal my cryptocurrency. It is safest to use two separate devices for multisignature transactions, so that even if one device has been hacked, the other is still safe.
Electrum also features a system where multiple computers can download an application that runs the same wallet, where one computer is permanently barred from access to the Internet and another is allowed online. This prevents my private key from ever being sent online, because the private key is only ever entered on to the barred computer. This is similar to using a cryptocurrency hard wallet such as Trezor or Ledger, and it allows me to make use of an old computer that I wouldn’t otherwise be using, as long as I never connect the older computer to the Internet. The way I would do this is to install Electrum Wallet on the offline computer, and going to Wallet -> Information, where I can view the Master Public Key of the wallet. I must copy this key code down, either using a device like a flash drive, or through writing the code on to paper. Then on the online machine, I install Electrum and select New/Restore. I then create a standard wallet, selecting ‘Use public or private keys’. I then must paste or type in the public key into the box. The program will then inform me that I have created a watching-only wallet that I cannot spend any cryptocurrency with. See ‘Using This Wallet’ for instructions on how to send cryptocurrency with this method, called the ‘cold-storage method’.
When I install Electrum, the software prompts me to write down a seed key on to a piece of paper. The seed key is a list of twelve randomly chosen words, from which I can restore my wallet entirely from scratch, should I ever lose access to the device that I was using Electrum on, through loss or theft. After I receive my seed key, I am asked to type it in to confirm that I have received it. It is critical that you keep your seed key safe, and recommended that you keep your written seed key in another location to where your computer is kept, because it is possible that any fire or flood or theft that destroys your computer might also destroy your seed key. Remember that anyone who has access to your seed key can steal the cryptocurrency out of your wallet.
Using this Wallet
Electrum is neither easy nor especially difficult to use. Its extremely minimal interface suggests that it is designed for people with significant computer literacy, and the help documentation available for it already presupposes a fair amount of knowledge. The visuals of Electrum are spare and text only – consider that Electrum can be run from the command line. Such visuals again suggest an upper-intermediate user or above.
Receiving cryptocurrency is easy – as with any wallet, all I need to give someone is my wallet address, and the funds will be deposited inside the wallet when the wallet accesses the blockchain. If I am using the cold storage method, my funds will have to be dropped into the online wallet, from where they cannot be sent out again without access to the offline wallet.
Sending cryptocurrency without the use of the cold storage method is also easy, but not recommended as it is less secure than using the cold storage method. If I choose the cold storage method, I will have to begin with my online wallet. I create an unsigned transaction by clicking on the Send tab and choosing the amount, and clicking to accept the fee. After this, I save the file that is generated by the wallet on to a USB flash drive. Then I take the flash drive or other storage device to my offline machine, open Electrum on there, and choose Tools -> Load Transactions, and select the file that I have saved. I then press the ‘Sign’ button to sign the transaction. I will now have another file to save. I save this file and transfer it to my online computer. On my online computer, I select Tools -> Load Transaction and choose the file with the signed transaction, and then press ‘Broadcast’ to upload the transaction to the blockchain.
Alternatives to this wallet
Agama/Komodo is another desktop wallet that I consider difficult, and is for advanced users. Agama has many more features and supports many more cryptocurrencies, but it is, in my opinion, even trickier to use than Electrum. For a much simpler and more user-friendly desktop wallet that supports far more currencies than either Electrum or Agama, try Exodus. The application is not as lightweight or versatile, and cannot be run by the command line, but the majority of users will not care about this.
There are also many mobile wallets with nearly equivalent or equivalent security features that are much easier to use, such as Enjin, Edge, and Mycelium. All of these offer anonymity as well, and in the case of Enjin, the anonymity is even stronger than Electrum.
Electrum is designed to integrate with hardware wallets, and as such, hardware wallets do not qualify as ‘alternatives’ to Electrum.
Electrum is a lightweight, versatile wallet application with sound security features. Electrum is clearly designed for people with significant skill and experience in using computer applications. Therefore, unless you are an upper intermediate computer user, I would not recommend Electrum for you, as its advantages would not cancel out the disadvantages of difficulty of use, where easier wallets with equivalent features can be found.
For a computer hobbyist who wants to save money, experiment with cryptocurrency and the programming thereof, and wants an application simpler than Agama and cold storage cheaper than Ledger or Trezor, Electrum may be very useful. It will run on very old computers with extremely basic hardware requirements, even from as old as 20 years ago. However, for most people, there are simpler and more elegant wallets available.
David is a forex trader and writer who has spent the last few years giving his opinion and spreading news about oncoming markets and trading tips. Besides from being a trader he is also a lifelong Everton fan and enjoys spending free time watching his beloved team in the premier league.