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Cryptocurrencies

Electrum Bitcoin Wallet Review 2020: Features, cost, pros and cons

Electrum Bitcoin wallet is arguably one of the most popular and oldest software wallet currently available. It launched in November 2011, and it is estimated that more than 10% of all bitcoins transactions conducted today involve Electrum bitcoin wallets. Created by Thomas Voegtlin, a German computer scientist, the wallet technology is open-sourced, allowing for consistent developments that make it the most secure software wallet around. The bitcoin-only wallet is feature-rich but can, at times, be said to have prioritized system features over user-friendliness. 

In this review, we look at some of the factors making Electrum one of the most trusted software wallets, its key features, and compare it with other hot and cold wallets.

Electrum Key features:

Mobile and desktop: While it started off as a pure software wallet, Electrum has evolved over the years and is currently available as desktop and android apps. Both are regularly updated and patched to address different vulnerabilities and enhance their ease of use.

Fast: You don’t need to download the entire electrum blockchain to store your coins. You only need the software wallet that is stored within your phone or desktop, and this contributes to the expedient electrum transactions.

Hardware wallet integration: Electrum can integrate with all the popular hardware wallets out there, including Ledger Nano S, Keepkey, and Trezor. The integration makes it possible to access all electrum features, including the transfer of bitcoins in and out of the electrum wallet via the hardware wallet interface.

Tor support: In a crypto industry first, Electrum wallets are now compatible with the Tor browser. Tor is popular for its IP masking capabilities, and the integration is in line with its commitment to upholding user anonymity.

No Downtime: The electrum server network is highly decentralized, a move that eliminates the possibility of a central point of failure. This decentralization and the fact that it is highly vetted by industry professional has also eliminated the possibility of downtime.

OS compatibility: Electrum is highly versatile and is compatible with all popular operating systems, including Linux, Windows, and macOS desktops, as well as Android smartphones.

Export coins to another wallet: Electrum wallet doesn’t lock in your funds, implying that even though it doesn’t allow for integration with other software wallets, you are free to transfer your digital assets held in an electrum wallet to any other software or hardware wallet seamlessly.

Security features:

Password protected: The Electrum bitcoin wallet is password-protected, and you get to set the password for your wallet during installation.

Cold storages: The electrum desktop, to a certain extent, can be considered cold storage. While it stores your bitcoins in desktop wallets, your private keys are safely tucked away from any internet connections.

Multi-signature: You can use the recovery phrase to open and maintain several electrum wallets on different devices, after which you can assign them the multi-sig capabilities to ensure that even if one was compromised, the bitcoins therein cannot be transferred without the permission of the other traders.

Offline key phrase generation: Like hardware wallets that generate sensitive wallet information like pin codes and recovery phrases on the internet detached devices, Electrum supports the offline generation of the recovery phrase. It allows you to generate the password and recovery words offline, away from malware and keyloggers.

Anonymous users: Electrum is one of the few wallets that support anonymous account creation. Virtually anyone can, therefore, download the Ethereum software wallet and create an anonymous user account. 

Currencies supported

Interestingly, the electrum desktop and smartphone wallets will only support hold bitcoins. The open-source nature of the technology used to develop the electrum wallet has encouraged the offshoot of electrum wallet forks that specialize in holding Bitcoin cryptocurrency fork currencies like Bitcoin Gold, Litecoin, and Bitcoin Cash.

Electrum wallet cost and other fees

Electrum wallet company is a service provider. While they don’t charge you for downloading the wallet, you will incur a transaction fee every time you send bitcoins from your account. Currently, the wallet imposes a default flat fee of about 0.2 mBTC per transaction.

The rate is, however, not fixed and will often fall to around 0.1 mBTC depending on such factors as the amount you wish to send.

Note: 1 mBTC refers to a millibitcoin (one-thousandth of a bitcoin).

Setting up the Electrum wallet:

How to install the Electrum wallet:

Step 1: Start by downloading the Electrum wallet from the official Electrum website (www.electrum.org) based on your desktop’s operating system.

Step 2: Proceed to the installation page where you will be asked to chose between standard wallet, Multi-signature wallet, wallet with two-factor authentication, or import bitcoin wallet or private keys. Chose accordingly, but for simplicity purposes, we will highlight how to create a standard wallet.

Step 3: If you choose the standard wallet, the question will be whether you wish to create a new seed or recover a wallet using an existing seed. If you had lost access to a smartphone or desktop holding your private keys, you would go for restoring a wallet using the word seed you have. But since we are creating a new account, we click on “Create a new seed.”

Step 4: The installer will display a 12-word recovery seed that you are required to write down.

Step 5: The next window displays a confirmation window that requires you to key in the recovery seed words to verify that you captured them accurately.

Step 6: Proceed to create your unique electrum password and store the recovery seed in a safe place. Your wallet is now ready for use.

Sending and receiving coins:

To receive bitcoins from your other wallets or third parties, you need to first access your online electrum wallet:

Step 1: Click on the receive icon.

Step 2: The wallet will display the bitcoin receiving address

Step 3: Copy the address and send it to whoever you wish to receive your bitcoins from

To send payments from your Electrum wallet, you still need to first access your electrum wallet on your browser:

Step 1: Click on the send payment icon.

Step 2: Key in/paste the wallet address you wish to send bitcoins to and the amounts you want to send (inclusive of the electrum wallet transaction fees)

Step 3: Confirm the details before authorizing the payout

Electrum hardware wallet pros and cons:

Pros:

  • It is one of the most accepted and widely used bitcoin wallets primarily because it is inexpensive.
  • Embraces several high-quality security features like the multi-signature and two-factor authentication
  • Can easily integrate with the more secure hardware wallets
  • Electrum wallet is feature-rich
  • Maintains an easy setup process for new accounts and recovery of lost private keys

Cons:

  • Can be easily compromised by powerful key logger malware that records all your account sign in details
  • You must maintain a highly powerful antivirus software to keep malware out, which might be costly over time.
  • Electrum software wallet prioritizes the feature richness of the wallet over its user-friendliness.
  • Despite there being 1000+ cryptocurrencies and tokens, the Electrum wallet will only support bitcoins.

Electrum wallet compared to competitors:

Electrum wallet’s biggest strengths and advantages emanate from its wide range of security features. In the face of online hot wallets that like the eToro and Coinbase, Electrum may seem complicated to use as you are required to first move your funds to the crypto exchange before trading them. The move is tedious and costly. Not to mention that they support a wider range of cryptocurrencies and tokens Electrum, on the other hand, can be considered secure than either of these given its cold storage, multi-signature, and recovery seed features.

Customer support:

The fact that the Electrum is an open-sourced project with no central authority can be attributed to its near-nonexistent customer support service. On their website, for instance, you will only find the social media links and no phone number or live chat feature.

Verdict: Is the Electrum wallet worth buying?

Bad as Electrum bitcoin wallet’s customer support service maybe, it still remains the most formidable bitcoin wallet. Nearly 10% of all bitcoin transactions today can be traced back to an electrum wallet. Anyone looking for an inexpensive wallet that only maintains relatively low transactions should look for an electrum wallet. It also appeals to experienced crypto traders who are looking for a balance between fast transaction processing and the safety of their digital assets.  The low transaction fees also tend to favor low-volume traders and investors. Our verdict: Electrum bitcoin wallet provides value for money.