- >Best CryptoWallets
- >Electrum Wallet Review 2021
- Two-factor authentication available for transactions
- Hardware wallets can be used with this wallet
- Default wallet included in the Tails operating system for privacy-focused users
- Bitcoin support only
MyEtherWallet at a Glance
Beginner Perspective of Electrum
Electrum allows newcomers to Bitcoin to take full control over their funds via a rather easy to understand user interface. Users are unable to purchase cryptocurrency from within the app, however, that’s a security advantage as it gives the user full custody of their bitcoin. It is a solid option for new users who wish to have control of their private keys to the wallet, after purchasing Bitcoin on an exchange and sending it their Electrum wallet.
Although some users are disappointed by the lack of altcoin support from Electrum, the reality is this setup simplifies the user experience and avoids any confusion through complexity. The support of hardware wallets and multi-signature addresses also makes it easy for users to make sure that their funds will remain secure and out of the hands of hackers. The integration of the Lightning Network will also enable faster and cheaper transactions for Electrum users.
The best features of the Electrum wallet revolve around advanced Bitcoin functionality and security features. Additionally, the ability to perform on-chain transactions at a cheaper fee.
Electrum is also extremely useful for those who wish to gain better privacy at the network level. Tails is generally regarded at the best operating system for retaining online anonymity, and Electrum is the default Bitcoin wallet included in that particular distribution of Linux. However, it should be noted that Electrum does not include any method of mixing coins by default, which is the ability to make transactions more anonymous, enabling greater privacy. Thus, there could be some improvements when it comes to tracking user payments via the blockchain.
The ability to use a hardware wallet with the Electrum wallet also allows users to make sure their funds are as secure as possible.
What Cryptocurrencies are Supported?
Electrum only works with Bitcoin. However, the wallet software has been forked by separate development teams to support various altcoins such as Bitcoin Cash and Bitcoin Gold. These alternative forms of the Electrum software go by different names.
Electrum offers a wide variety of different security options for its users. In terms of keeping your private keys safe, there are a few different setups that can be used. When creating a new wallet, you get to choose from the following options: wallet with two factor authentication, standard wallet, multi-signature wallet, and hardware wallet.
Two Factor authentication gives you an added layer of security. With each transaction that is made on the Electrum wallet, a two-factor authentication code from another device must be supplied in order for that payment to be sent.
Hardware devices are another option when it comes to enhanced security protections with Electrum. Devices from Ledger and TREZOR, which are the two most well-known brands in the hardware wallet industry, will work with Electrum. Coldcard devices from Coinkite also work with Electrum.
It should be noted that old versions of Electrum had a security vulnerability that allowed malicious Electrum servers to trick users into downloading malware that allowed hackers to steal user funds. The attack was enabled by the fact that Electrum servers were able to send arbitrary text along with error messages related to transactions. Attackers were able to use this vulnerability to send fake requests for users to update their Electrum software. The download links sent to users were in fact for malicious software. Hence, it is important to always have the latest version of electrum when using the wallet.
It should also be remembered that Electrum is not full node Bitcoin software, which means miners and server operators are somewhat trusted to provide correct information about transactions.
Supported Operating Systems
Electrum is available on Mac, Linux, and Windows desktop environments. Notably, the Electrum wallet software is included in the privacy and anonymity-focused operating system Tails by default.
In terms of mobile operating systems, Electrum is currently only available on Android devices.
Electrum will be the perfect wallet solution for a large number of Bitcoin users, but there are some niche features missing that may turn off some people.
If you’re someone who is interested in using a variety of cryptocurrencies, then you’ll need to find another wallet. Jaxx Liberty and Exodus are other greats options for altcoin users because they offer a wide variety of different cryptocurrency integrations.
If you’re a die hard Bitcoin maximalist who wants to reach the highest level of trustless-ness possible, then the fact that Electrum is not a full node will be an issue. If you want to be able to completely verify the entire history of the blockchain on your own, then you’re probably better off going with Bitcoin Core. Having said that, it is possible to use Electrum in a trustless manner by pointing the wallet to your own backend server.
It’s also not yet possible to use the Lightning Network via Electrum, but support for this layer-two Bitcoin payments technology is expected soon.
Electrum Frequently Asked Questions
SPV is a way for lightweight Bitcoin clients to verify that a particular transaction was included in a block without downloading the entire block. Electrum uses this feature to limit the amount of resources that are required by a user’s computer to run the wallet software.
A large number of Electrum users were hacked in the past due to a security issue created by server error message handling in past versions of the software. To be clear, users were not hacked directly due to a vulnerability in Electrum. Instead, hackers used the ability to send error messages to Electrum users from Electrum servers that told them to download malicious software that let to the theft of funds.
This vulnerability has been patched in more recent versions of the Electrum wallet software.
Despite the above-described security issue from the past, Electrum is viewed as a safe Bitcoin storage option, especially if advanced tools like multi-signature addresses, two-factor authentication, or hardware wallets are used. These sorts of tools make it so hackers either need to gain physical access to a piece of hardware or compromise multiple devices in order to steal funds from a user.
Electrum is one of the most well-known wallets on the market, and it has also been around for a long time without introducing vulnerabilities that led to the direct theft of user funds.
Two-factor authentication in Electrum is provided by TrustedCoin. When creating a new wallet in Electrum, users have the option to make this a two-factor authentication-enabled wallet. This will create a 2-of-3 multi-signature wallet for the user where two keys are held by the user and one is held by TrustedCoin. Every time the user attempts to make a transaction, TrustedCoin will need to sign off on it. TrustedCoin will only sign a transaction if the user inputs a two-factor authentication code from an app on their smartphone such as Google Authenticator.
To start using Electrum in Tails, you just need to go into your internet applications and choose the Electrum Bitcoin wallet.
It should be noted that using Electrum via Tails does not make your Bitcoin activity anonymous. It is still trivial to track transactions directly on the blockchain due to a lack of mixing capabilities in Electrum.