Electrum represented an important milestone in the history of bitcoin. Before Electrum debuted in 2011, most bitcoin wallets were insecure, sluggish and not very user-friendly. Early adopters of Electrum– one of the first HD (Hierarchical Deterministic) wallets ever released– appreciated its improved security, flexibility, intuitive interface and customizability. Today, however, Electrum’s stripped-down feature set and lack of integration with other crypto services makes it seem a bit behind the times.
The Electrum team’s slow response to a recent security issue is also a major negative point. The wallet’s developers failed to react when a GitHub programmer pointed out a serious security glitch last year. Instead, they ignored the problem until high profile security researcher Tavis Ormandy tweeted about it several months later. Even though Electrum’s developers managed to address the issue before a publicized hack occurred, their apparent lack of attention to detail has damaged Electrum’s reputation as a more secure way to store bitcoin.
Electrum gave crypto enthusiasts a better way to trade bitcoin back when bitcoin was still worth around two dollars. However, there are few logical reasons to use Electrum today. Over the past several years, other wallets have emerged that offer better features and support a wider range of cryptocurrencies.
Bitcoin is the only cryptocurrency that Electrum supports. Because Electrum’s code is open source, any development team can modify Electrum’s code and rebrand it.There are now several other forks of Electrum that work with other cryptocurrencies besides bitcoin.
Electrum-LTC, for example, is based on Electrum’s open source code and shares many of its features. The main difference between the two wallets is that Electrum-LTC supports litecoin, not bitcoin. In addition, Electrum-LTC’s development team has yet to produce any mobile apps.
Dash Electrum is another port of Electrum that supports dash– a faster version of bitcoin that features a different type of mining algorithm.
Electrum doesn’t accept any type of fiat currency– just bitcoin.
As mentioned above, one major limitation of Electrum is that its interface doesn’t provide any built-in option for trading one cryptocurrency for another. Other crypto wallets have built-in links to convenient non-custodial crypto exchanges like Changelly and ShapeShift. Though Electrum still works with those crypto services, the lack of interface integration makes Electrum look somewhat out-of-date.
Hard fork policies
If the developers of a cryptocurrency run into a disagreement about how the coin should work, they sometimes fork the code, leave the development team and strike off on their own.
In an interview with Bitcoin Magazine, Electrum founder Thomas Voegtlin elaborated on his conservative point of view regarding bitcoin forks.
“The team of developers that are behind Bitcoin Unlimited actually did not create a patch of the project, but they forked it a long time ago. The version of Bitcoin that they maintain is now completely different. They have diverged, which is not a good idea. Well, it’s a good idea to fork the project if you want to replace the developers, if you want to fire them.”
Voegtlin’s faith in bitcoin’s core development team may explain why Electrum hasn’t added any support for altcoins.
Security & Privacy
Though Electrum has never been successfully hacked, its developers were criticized in early 2018 for failing to address a critical security problem that could have let hackers gain full access to Electrum wallet users’ bitcoin balances.
In November of 2017, a GitHub user notified Electrum about a bug that could compromise its users’ security. The user noted that “someone on a different virtual host of the web server could easily access your wallet via the local RPC port” and that whoever had access to the port could gain “full access to the wallet.”
That bug wasn’t patched until January, after security researcher Tavis Ormandy pointed out how serious it was. Once the bug was finally fixed, Ormandy tweeted about what had happened:
“The bitcoin wallet Electrum allows any website to steal your bitcoins. I was gonna report it…but there was already an open issue from last year. I pointed out this is kinda critical, and they made a new release within a few hours. Update to 3.0.4 if you use it.”
The next day, Electrum tweeted that the 3.0.4 update mentioned in Ormandy’s tweet didn’t completely resolve the vulnerability. The company urged its users to download the 3.0.5 update, which seems to have provided an adequate fix.
In an interview with Motherboard, Electrum founder Thomas Voegtlin claimed that Electrum’s security team didn’t initially realize how serious the problem was when it was first pointed out in 2017. Motherboard also reached out to postgraduate researcher Mustafa Al-Bassam, who said that the vulnerability had existed since 2016.
Downloading and Using Electrum
Electrum is available on a handful of different operating systems, including Windows, Linux, macOS and Android. Its core features are the same across all platforms, though there are a few negligible feature differences. The Windows desktop version of Electrum, for example, gives you the ability to switch between a light and dark version of the interface.
Though the desktop version of Electrum seems to run fairly well, the same can’t be said for Electrum’s Android app. Complaints about bugs and glitches have resulted in a mediocre 3.2 Google Play rating.
Given the fact that Electrum has been around since 2011, it’s surprising that the Electrum app sometimes hangs on the splash screen when you load it. It’s easy to see why someone who downloaded the app and ran into that glitch would simply assume that it doesn’t work at all and write a one-star review.
Electrum plugs nine of its major features on its official website. Here’s a breakdown of what those features mean.
- Encryption. Unlike early bitcoin wallets, Electrum uses encryption to protect your private keys when you store them on your computer.
- No lock-in. First generation wallets could only be accessed on one machine, but Electrum wallets can be accessed on multiple devices.
- Cold storage. Electrum gives you the option to store your crypto assets offline. Cold wallets are more difficult to hack because they’re not connected to the internet.
- Forgiving. Another advantage that Electrum has over the first generation of bitcoin wallets is that your funds can be recovered with a secret phrase.
- No downtimes. The servers that Electrum relies on are redundant, so even if one server goes down another one can take over.
- Multisig. If you need extra security, you can set your Electrum wallet to require signatures from several different wallets.
- Instant on. The very first bitcoin wallets required that their users download the entire bitcoin blockchain every time they use it. Electrum is faster than those wallets because it relies on servers that index the blockchain.
- Proof checking. Electrum uses a bitcoin feature called SPV (Simple Payment Verification) to verify transactions. This makes Electrum theoretically safer to use compared to web wallets, since Electrum interacts with the blockchain directly and you don’t have to trust a third party website with your payment info.
- Add-ons. According to the Electrum website, Electrum wallets can be enhanced with customizable plugins. Coinapult came out with an Electrum plugin called Locks in 2014.
Getting started is fairly easy and clicking through Electrum’s Windows installer is a straightforward process.
The Windows version of Electrum is depicted below. As is the case with Electrum for Android, the interface consists of three self-explanatory submenus.
Perhaps the most notable thing about the interface is the Fee slider, which lets you customize the amount that you’ll pay in mining fees when you make a bitcoin transaction.
Normally, bitcoin traders pay less than the equivalent of a dollar to make a bitcoin transaction. However, mining fees can skyrocket when the network is busy. According to BitInfoCharts, bitcoin traders paid an average transaction fee of $54.90 at the end of 2017, when the price of bitcoin was surging to record heights.
Though Electrum’s interface is basically the same across all platforms, the desktop version does have a few extra features. The Preferences menu lets you set a custom identity using OpenAlias or SSL, for example.
Electrum for Android sometimes gets stuck on the loading screen. This glitch is perhaps the most likely cause of Electrum’s low Google Play rating. Many users simply assumed that Electrum doesn’t work after running into the glitch the first time they use the wallet, then they give it a one-star review and try a different app.
The dashboard consists of three menus: Send, Balance and Receive.
The Receive menu lets you accept BTC payments using either a QR code or the text version of your bitcoin address.
The settings menu allows you to switch the default language, set a new PIN code, set a different bitcoin denomination, display the value of your wallet in fiat currency and sync any labels you may have attached to your bitcoin payments. You can also opt to toggle non-final transactions via the “replace by fee” settings option. The final two menu options give you the ability to spend unconfirmed coins and send change generated by transactions to a separate address.
More About Electrum
Electrum was initially launched in the early days of bitcoin, back in November of 2011. At that time, the price of bitcoin was hovering around just two dollars.
Electrum founder Thomas Voegtlin announced the debut of Electrum on the BitcoinTalk forum. At launch, Electrum was one of the first HD (hierarchical deterministic) wallets to reach the market. Its core features included local storage of private keys, easy wallet recovery via a “secret phrase that you can write on paper or learn by heart,” open source code, no downtime and the ability to access a wallet on multiple computers.
Bitcoin enthusiasts were excited about Electrum because, at the time, most bitcoin wallets were following the bitcoind wallet standard. Bitcoind wallets are less secure than HD wallets and require constant backups.
Electrum continued to gain popularity after its debut. However, there was one problem: Electrum Server was slow and difficult to use. Computers running Electrum Server routinely create indexes of bitcoin’s blockchain, thus saving Electrum clients from having to do that heavy computational work. The lack of Electrum servers limited Electrum’s growth until 2016, when developer Neil Booth debuted ElectrumX– an upgraded, faster version of Electrum Server.
The next major milestone for Electrum was the security issue mentioned above. Electrum received some negative press after it became known that Electrum’s developers had ignored a critical security bug.
According to the about section of the Electrum website, four developers have been involved with Electrum since it debuted in 2011.
Thomas Voegtlin – founder, developer
Voegtlin lives in Berlin, Germany and was a researcher at a French computer science institute called INRA before he decided to start Electrum. In an AMA, Voegtlin described himself as a “computer scientist with a PhD in machine learning and neural networks.” He sometimes does interviews with the press to comment on various cryptocurrency developments. Bitcoin Magazine interviewed Voegtlin in April of 2017 to get his opinion on a bitcoin fork called bitcoin unlimited.
Maran Hidskes – developer
On his personal website, Hidskes describes himself as a “full-stack developer living in Amsterdam.” He was involved with developing Mastercoin, Ethereum and several other notable cryptocurrency projects.
Michael Wozniak – developer
Wozniak is a Venice, California-based developer who has contributed code to Security Monkey, Pycoin and Envoy.
EagleTM – developer
Not much is known about the fourth member of Electrum’s development team, other than that his GitHub credits include Poloniex, bitcoin core and BitPay.
Electrum is historically important because it was one of the first HD wallets to hit the market. Today, however, there just aren’t that many compelling reasons to use it. The lack of attention to detail exhibited by the developers earlier this year combined with stale features and a buggy Android app make it hard for Electrum to compete with newer wallets like Coinomi, Jaxx and Exodus.