Electrum is one of the earliest Bitcoin wallets, having been introduced near the end of 2011. It is a lightweight, no frills wallet that’s designed to be easy to use while also maintaining a high level of security.
While Electrum does have a number of features, like hardware wallet support and the ability to set the Bitcoin transaction fee, for the most part it’s much less feature-rich than some of the more modern wallets.
You should always do research before downloading or installing any Bitcoin wallet.
With that in mind it can be helpful to look at what type of cryptocurrency investor the Electrum wallet is designed for.
Electrum isn’t designed for people just joining the blockchain space, it’s meant for cryptocurrency traders and investors who already know how Bitcoin works. There are no animated guides or walkthroughs and the GUI has not changed much since the wallet was introduced nearly a decade ago.
Traders who want a dead simple wallet without any fancy features will find Electrum useful.
The first step is to download Electrum directly from the official website. It’s important to do so because third party websites may host a version of Electrum wallet that’s been designed to steal any Bitcoin that gets sent to it.
After downloading the wallet open the .exe file and follow these steps.
Electrum will now provide you with a seed phrase. Write this down on a piece of paper and keep it somewhere safe. Never save the seed phrase as a digital file on your computer.
Choose a password for your wallet. If you forget the password you’ll need to reset the wallet with your seed phrase. If you lose both the password and seed phrase your Bitcoin will be lost forever
That’s it, the wallet is now set up and you can begin using Electrum.
Electrum does not support the buying or selling of cryptocurrencies. As mentioned, it’s a simple wallet designed to safely store Bitcoin.
You can buy bitcoins on an exchange and send them to your Electrum wallet.
Here are some exchanges:
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Getting an Electrum address is simple. All you need to do is open the wallet and click on “receive.” Directly below that a Bitcoin address will appear.
You can send any amount of Bitcoin to this address, just make sure that you have your seed phrase backed up in redundant locations before you use Electrum to store significant amounts of Bitcoin.
Electrum supports any valid Bitcoin transaction, regardless of where it originates from. Whether you’re receiving a transaction from a person, an organization or a business, so long as it’s being broadcast on the Bitcoin network Electrum can support it.
For the most part, yes. Electrum has a proven security record and the wallet itself has never been hacked. What has been hacked, however, is the update mechanism.
Through the use of a sophisticated DoS attack hackers were able to push a recommendation to Electrum users that they update their wallet. Unfortunately users who clicked on the link to update ended up downloading a malicious version of Electrum that stole all of their funds.
Millions were reportedly lost to this scam before Electrum was able to shut it down. While this event was very unfortunate, as already noted it only affected users who downloaded a new version of Electrum, the wallet itself was not compromised.
So with this in mind, Electrum is safe provided that you keep your seed phrase safe and only ever download new versions of Electrum directly from the website. Be extremely skeptical of any message pushing you to update which originates from within the Electrum wallet.
Since 2011 Electrum has only ever supported Bitcoin and it’s likely to stay that way for the foreseeable future. If any other coins were ever to be supported the most likely candidates would be Bitcoin Cash or Litecoin, which run on code similar to Bitcoin’s.
Open your wallet and enter the password in order to go to the main screen. From there you can click on “Receive.”
At the top a Bitcoin address will be displayed. Copy and paste this address and use it to send funds to your wallet. Below the address are several other boxes, like “description” and “requested amount,” these can be ignored.
Note, each time you receive a transaction Electrum will generate a new address for you to use. This is a security feature which makes it difficult for any one person to trace all of your transactions. It’s recommended to use a new address each time instead of re-using an old one.
Backing up an Electrum wallet is simple. As mentioned, you should write down the seed phrase when you first create an Electrum wallet. The seed phrase is the best backup for an Electrum wallet.
After creating the wallet you can also backup your private keys. To do so click on “wallet,” select “private keys” and then “export.” Ideally these private keys should only be kept on a cold device, one not connected to the internet, like a USB drive.
Finally, if you forgot to write down your seed phrase when you created your wallet you can view it by clicking on “wallet” and then “seed.”
This error message happens when the Electrum wallet is having trouble connecting to a server. One possible reason is that a user is connecting through Tor. In some cases this can cause a delay in connection between the wallet and the server.
To fix the problem try connecting without Tor. Also, in the bottom right hand corner click on the red or green bubble, click on server and unclick “select server automatically.” Now try selecting different servers until the Electrum wallet connects.
To calculate transaction fees Electrum takes an average of all transaction fees paid recently on the Blockchain network and then analyzes how long it took for a transaction to be included in a block.
Using these historical averages Electrum is able to make a fairly accurate prediction of what size fee is required for a transaction to go through.
It’s important to realize, however, that these are only estimates and if a transaction must clear immediately it’s always better to pay a bit more. Also, if a transaction is not confirming fast enough it’s possible to increase the fee so that it’s included sooner in a block. A full guide on doing so is available here.
To restore an Electrum wallet you should have your seed phrase. After that follow these steps.
That’s it, Electrum will automatically import your wallet and your Bitcoin.
The best way to claim Bitcoin Cash is to import the private keys from your Electrum wallet into an Electron Cash wallet.
Electron Cash supports Bitcoin Cash and can be used to access any BCH which a user has from the fork. A full guide on how to get Bitcoin Cash is available here.
No, Electrum only supports Bitcoin and they have not announced an intention to support any other coins at this time.
The Electrum public key is derived from the private key and is used to generate wallet addresses. Another use case is for encryption. Someone can use a wallet’s public key to encrypt a message which can only be decrypted by someone with the private key.
Altogether though the public key is mostly a backend feature and most traders and investors will never have a reason to use their public key.
As mentioned already in this review the best way to update Electrum is to download a new copy of the wallet directly from Electrum’s website.
Simply download the .exe file and follow the prompts. Updating Electrum should only take several minutes.
The Ledger Nano S and Ledger Nano X are the best hardware wallets to use with Electrum. A guide to using these hardware wallets with Electrum can be found on Ledger’s website.
Sending Bitcoin from Coinbase to Electrum is simple and should only take a few minutes.
Depending on how congested the Bitcoin network is the transaction might appear immediately in Electrum or it could take up to an hour or two.
The biggest differences between Electrum and Bitcoin Core are that with Bitcoin Core you must download the entire Bitcoin blockchain. That’s because the Bitcoin Core wallet is a full node wallet, allowing you to personally verify all your transactions on your own. You can do this with Electrum too, but you don’t need to download the entire blockchain if you dont want to (though you should).
Electrum is also easier to use than Bitcoin Core.
However, it is MUCH easier to download an unsafe version of electrum due to phishing and scam versions of the software (or downloading an old version that is no longer safe). Bitcoin core are far easier to get right in this regard, so know you own limitations when choosing between the two.
Review by: Jordan Tuwiner