Electrum Cryptocurrency Wallet Review

Pros and Cons Explained

Pros Explained

• Easy setup across devices: Getting set up with Electrum on a computer and Android mobile device is easy. The installation wizard guides users through the process, thereby removing the complexities of creating the wallet. After installing the wallet, import it across devices using the 12-word seed phrase
• Compatible with major hardware wallets: The wallet supports integration with major hardware wallets, including Ledger Nano S, Trezor, and Keepkey.
• Personalized security: Electrum allows users to choose between multiple-signature, 2FA, or standard security options for securing their Bitcoin. A multi-sig wallet offers the highest level of security, while a standard wallet is ideal for those looking to hold their BTC in a hardware wallet. The 2FA security option, on the other hand, is a good middle ground for users looking for quick access to funds, as well as an additional security layer. 
• Beginner-friendly: Using the Electrum wallet for sending or receiving BTC, invoicing, encrypting messages, checking transaction history, and other in-app functions is easy. With a smooth and navigable layout, Electrum is an optimal choice if this is your first foray into Bitcoin.
• Open source: The wallet’s software is open and available to the public. Users with sound development knowledge can check over the code to find potential errors or vulnerabilities. Keeping it publicly accessible allows the Electrum core team to spot cracks and update the code accordingly. 

Cons Explained

• Past security issues: The wallet has a long history of providing secure storage of Bitcoins. However, in 2018, hackers were able to exploit a vulnerability in Electrum client version 3.3.3 with a very clever phishing attack, resulting in a loss of about $750,000. 
• Supports Bitcoin only: Users can only store Bitcoin on Electrum. The wallet has never offered support for any altcoins. However, since Electrum software is open-source, many forks of the Electrum wallet are available in the market to support other cryptocurrencies. 
• Lack of customer support: Electrum does not offer direct customer support despite having a huge user base. To ask questions, users need to post them to BitcoinTalk Forum or the Electrum social media channels.

Features

Electrum is an encrypted wallet that allows users to password-protect their Bitcoin. Users are always in control of their keys and can export and use them in other Bitcoin-supported wallets if required. If a user loses their Electrum wallet file, they can use their seed phrase to recover their assets. 

In addition to offering security features like multisig and cold storage, Electrum wallet supports hardware wallet integration and is firewall friendly. Plus, it has no single points of failure because anyone can run their own server with Electrum. It also means there are no downtimes if you are using the Electrum wallet.

The wallet features the Simple Payment Verification (SPV) method to verify all transactions without requiring users to download the entire Bitcoin blockchain. It makes Electrum lightweight, thus allowing users to send and receive BTC quickly. For an even better BTC payment experience, Electrum supports Lightning Network for faster and relatively cheap Bitcoin transactions.

Security

Electrum wallet is non-custodial. Therefore, users are in control of protecting their private keys. However, they can use additional security features of the wallet. For example, users can select between 2FA and multisig to add a layer of protection from hackers or simply integrate their Electrum wallet with third-party hardware wallets. 

Since Electrum is open to the public, hundreds of independent developers have vetted it and even contributed more than 15,000 commits to wallet's software code. 

Despite staunch security features, Electrum users have fallen victim to phishing attacks that allowed hackers to steal funds through malicious websites. The team dispatched that vulnerability later. However, as the wallet does not support automatic updates, users must update their wallets frequently to ensure they are using the latest version.

Privacy and Anonymity

Electrum never stores private keys. Instead, they are stored on the users’ devices locally. The wallet encrypts both—the private keys and the seed phrase—to protect users' privacy. To decrypt the wallet file, users must enter their password.

In addition to wallet encryption, Electrum allows users to run their own servers if they prefer more privacy. To ensure all servers send correct information, it uses SPV to verify the reported data. 

Furthermore, Electrum allows users to transact Bitcoin without revealing their identity. It's a no-KYC (Know Your Customer) wallet that can be used to buy Bitcoin anonymously. 

Setup  

The overall process of setting up the Electrum wallet is as easy as they come. You need to go to their official website and click "Download" to start the installation process. The wallet offers installation sources and binaries for several operating systems, including Android, macOS, Windows, Linux, and Python. 

During the setup, the wallet will ask you to choose the type of wallet you want to create. You can also opt to import an existing wallet. If you create a new wallet, make sure to write down your seed phrase. 

Usability

Desktop

The desktop version of the Electrum wallet is simple to use. Though it has a basic Windows 95 feel, it allows users to perform all main functions from the home screen, including sending and receiving Bitcoin, checking transaction history, or creating invoices. It also supports Lightning Network should a user want to send Bitcoin inexpensively. 

Mobile App

The mobile version of Electrum is currently available only on Android devices. Android users can install it either via direct download of the APK file or from the Google Play Store. It is lightweight and offers a great middle ground between ease of use and security.

Customer Service

Electrum doesn't have dedicated customer support. The wallet features a help section that allows users to check for regular updates, report bugs, or connect with the official websites. 

To ask questions, users need to put them to the Electrum communities on BitcoinTalk Forum or social media platforms like X (formerly Twitter) and Reddit. In addition, the wallet has an "Electrum documentation" page that offers several resources and articles for beginners and professionals. Users can access this page from the wallet directly. 

Cost and Fees 

The Electrum software wallet is free to run on all supported devices and operating systems. Users can download the mobile wallet from the Google Play store and the desktop wallet from the official website.

When sending Bitcoin, the wallet levies a default fee of 0.2 milliBTC (1 mBTC = 1/1000 of BTC) for transactions, which users can customize as per their preference. This can be done in the advanced settings available within the wallet. 

Final Verdict

Electrum is one of the most developed and feature-rich software wallets available. Nearly 15,000 commits on Github, navigable UI and UX, multi-sig and 2FA security, and hardware integration support make it an ideal Bitcoin-specific wallet.

It may not suit the needs of traders looking for multiple crypto assets in one place. However, experienced Bitcoiners most certainly will appreciate Electrum Wallet for its advanced functionalities and integration with Lightning Network for scalable Bitcoin transactions. 

Methodology

One of the most important things to consider before you transact in and store cryptocurrencies is that you have a suitable crypto wallet in place. To help determine the wallet that works best for you, we conducted a comprehensive review process of the top cryptocurrency software wallets.

Our review process is built around a quantitative ratings model that weighs key factors like security, costs, privacy, usability, customer support, and features according to their importance. Our team of researchers gathered over 40 data points and conducted extensive research for each of the 19 companies we reviewed. Our team of writers, who are experts in this field, then test drove each wallet to lend their qualitative point of view.

Our model gave preference to companies with the strongest security measures and reputations. Companies with rich features, such as supporting a large number of crypto assets, giving users the ability to sync with hardware wallets, and allowing for fee customization, also ranked highly.

Read our full methodology.