Whether you are new to the cryptocurrency space and you are in the market for the ideal crypto wallet for your particular needs, or you are a novice trader looking for storage solutions for your digital currencies, you have come to the right place. This review of the Electrum wallet aims to help users like you decide whether this software wallet fits your preferences and needs.
What is the Electrum Wallet?
Electrum is a software wallet that cryptocurrency enthusiasts can use to hold Bitcoin. It made its debut towards the end of 2011, making it one of the pioneer cryptocurrency wallets to exist. The early bird advantage makes it one of the most trusted wallets in the market today.
Who Are the People Behind The Electrum Wallet?
Thomas Voegtlin is the founder of the Electrum Wallet. He is a computer science researcher who specializes in neural networks and machine learning. Thomas got acquainted with Bitcoin at the tail end of the year 2010 and soon realized that there were no secure and easy-to-use wallet options. This encouraged him to develop the Electrum wallet as a solution that would address those drawbacks.
Advantages and Disadvantages
The Electrum wallet is designed to be open source. In 2019, Voegtlin implemented Lightning Payment into the Electrum wallet, during the Lightning Hackday event, which was held in Munich. This made BTC transactions faster and cheaper via the wallet.
One of the most notable aspects or features of the Electrum wallet is that it only supports one cryptocurrency, Bitcoin. Some may view this as a limitation especially those that wish to hold a diverse crypto portfolio that includes altcoins. The wallet's other disadvantage is the fact that it is a hot wallet, which means it is connected to the internet and is susceptible to risks such as hacking.
Despite its limitations, Electrum's advantages far outweigh its limitations. Here are some of its pros to consider before deciding whether this wallet is ideal for you:
- It has multi-signature support, which significantly increases its security.
- It simplifies Bitcoin transactions and is the ideal solution for people who make regular payments via BTC.
- Its open-source nature means anyone can evaluate its code to check for potential security breaches or bugs. Note that the wallet is freely available, and no download fees are charged. To download your Electrum wallet, click here.
- The Electrum wallet receives blockchain data from a server, which means users do not have to download the entire blockchain. Also, the wallet ensures that the user has control of their private keys which are not stored on the server, thus adding an extra layer of security.
- The wallet does not store any user information on the server, hence reducing the likelihood of information theft.
- The wallet calculates the amount in fees that the user will pay before they complete a transaction. Users also have the option of choosing whether they want fast or slower transactions depending on the urgency of their needs. Shorter transactions will be processed in fewer blocks while longer transactions will take more blocks, and this means shorter transactions cost more compared to the alternative.
What Security Measures Does the Electrum Wallet Offer?
Proper security measures are essential for every wallet especially if one wants to attract users. Wallets without proper security protocols are an easy target for hackers, and many crypto holders have lost their funds in the past due to such limitations. Fortunately, the Electrum wallet deploys proper measures to help users secure their digital assets.
The wallet features proper encryption, complete with password protection and private keys which are held or controlled by the user. This alone makes it more secure than a custodial account while also giving the user more responsibility for their wealth. You need not worry in case you forget your password or lose the device on which wallet is installed on because the Electrum wallet generates a seed phrase that can be used to reset the password and recover the account.
The Electrum wallet also has a backup feature that contributes to the ability to recover the wallet. Nevertheless, the seed phrase is the most important feature as far as account recovery is concerned. This is why it is important to write down and store the password securely, preferably in multiple places.
Who Is the Electrum Wallet For?
The Electrum wallet’s features make it easier to determine whether it is ideal for your particular crypto needs. For example, if you are looking for a crypto wallet on which you can safely HODL your cryptocurrencies for the long term, then this wallet might not be the ideal choice because it is a hot wallet. It might also not be ideal for those that have altcoins in their portfolio.
The ideal user for the Electrum wallet is the die-hard Bitcoin fan who transacts with the cryptocurrency regularly. Alternatively, users can use the wallet as a medium through which they can transfer their Bitcoin to and from a hardware wallet when they need to.
The Electrum Wallet’s Setup Process
If the Electrum wallet appeals to you, the next step should be to set it up in your preferred device so you can start using it. Note that the wallet is available for PC and also as a mobile app for both Android and iOS. You can download the wallet from here and you will be presented with different download options for different operating systems. Select the one that suits the OS in your target device, such as a Windows option for a PC, or the Android option for devices running Android OS.
Once the download is complete, click on the file to open and select the "Install" tab to commence the installation process. You will be prompted to create a new wallet or restore it in case you already have an existing account. The latter will require that you input your recovery phrase while the former will generate a new recovery.
Make sure you write the recovery phrase down and save it privately. The wallet will require you to input the recovery phrase before completing the process, to ensure that it is accurately saved. This is the most critical security component of the wallet and should thus be taken seriously. Also, set up a password that will be required every time you need to log in to your Electrum wallet.
How To Receive And Send Funds Through Your Electrum Wallet
Once the setup process is complete, your wallet is ready for use and that means funding it with Bitcoin. You can do this by clicking on the “Receiving” tab and then, copy your wallet address. Paste this address to the platform such as the exchange from which you will receive the Bitcoin or send it to the person who will send funds to you. If you are sending the funds from a crypto exchange wallet, click on the withdraw segment and paste your Electrum wallet address and specify the amount to be transacted. Also, make sure you are sending BTC and not any other cryptocurrency.
The process of transferring funds out of your Electrum wallet is just as simple. Click on the "Send" tab in the wallet, get the address to which you wish to send your Bitcoin, and paste it on the address field. Specify the amount you wish to transact and double-check the receiving wallet before completing the transaction. You also have the option to adjust the fees depending on factors such as urgency. The faster the transaction, the higher the transaction fee and vice versa.
The Electrum wallet is a great way for Bitcoin holders to conduct BTC transactions with ease. It is ideal for holding low amounts for regular transactions and can act as a great medium for moving BTC to and from a hardware wallet such as the Trezor or Ledger hardware wallets which are the ideal long-term crypto storage solutions for secure Bitcoin storage. To learn more about the hardware wallet Trezor and for more information about the Ledger hardware wallet. If you are interested in downloading the Electrum software wallet.