Exhaustive Electrum Wallet Review: legit or scam?
It also shows which cryptocurrencies can be managed, what fees can be expected and how the app compares to other wallets such as our test winner Wallet eToro.
Here are answers to all questions about the Electrum Wallet.
Setting up the Electrum Wallet - Our guide
The great thing about setting up the Electrum Wallet is that you have a lot of flexibility: For crypto beginners, there is a feature for easy installation - and for professionals, for example, the Python-sourced installation.
This is very simple: When setting up Electrum, you are first asked whether you want to create a standard wallet - or a 2-factor authenticated wallet, a multi-signature wallet or whether you want to import an existing wallet.
When installing the standard Electrum wallet, you are immediately redirected to a window that asks for seed phrases. Specifically, the question is whether you want to restore a wallet with an existing seed or create a new one with a seed, a master key or a hardware wallet.+
If you want to create a seed, you will be asked in a new window whether you want a standard or a Segwit wallet address and a recovery seed will appear. Next, you will be asked if you can reproduce it again. The most important thing, though, is to write it down externally.
Create a password
The last step is to create a password. This should not be done lightly, but should be of adequate length, case sensitive and contain special characters. After this step, the Electrum Wallet is set up.
Electrum Wallet type & general information
The history of Electrum Wallet goes back a long way: it was developed by German computer scientist Thomas Voegtlin back in 2011. The open source software has been continuously optimised by several developers and has therefore been considered trustworthy for a long time and is generally very popular among the community.
One of the further developments mentioned, for example, was in the area of compatibility: Although the wallet was designed as a desktop wallet, it can also be used on mobile devices since 2016. At the moment, it is suitable for Windows, Mac and Linux on the desktop and for the Android operating system on the mobile device. In addition, it can be integrated into the major hardware wallet players.
Although the Light Wallet was designed solely for the Bitcoin blockchain, the wallet underwent a change here as well: it split from the Electrum Wallet coding base to support altcoins and one branch changed to be compatible with the Verge blockchain. Despite this, the original Electrum Wallet can still only support one currency.
Below, an Electrum Wallet Review discusses advantages and disadvantages of the digital wallet and, for example, which coins you can store in it. In addition, an overview of the download is given and questions about transactions are clarified.
Electrum Wallet Advantages & Disadvantages
Electrum is a fast wallet because it uses servers that index the Bitcoin blockchain. And as a light wallet, it is not restricted by Bitcoin's network.
For example, compatibility with hardware wallets is also important: Electrum supports the Ledger, Trezor and Keepkey hardware wallets. If you combine a hot wallet with a cold wallet, this provides many times more security during use. With the so-called cold storage option, you can store your private keys offline and go online with a "watching only" wallet.
Another advantage in terms of security is the "In Wallet Encryption". This means that the private keys are encrypted. Moreover, they are only stored on the user's own device. Moreover, one has the possibility to switch between servers and export the private keys and use them in other Bitcoin clients.
Scripts are also not downloaded. This means that one does not run the risk of being sent codes by hackers on these servers so that they steal one's credit.
A feature that is already standard for many wallets is the 2 factor authentication. And you can also drive safely with the common multi-signature feature: With this, you can divide the permission to spend your coins between several wallets.
What can the Electrum Wallet do besides security?
Additional advantages of the Electrum Wallet: With the "Seed Recovery Phrases", you also have the option of recovering lost credit. Also practical: there are no crashes. Electrum servers are decentralised and freed. Anyone can manage a client.
The wallet also has something to offer in terms of transactions: It verifies all transactions in its own history with the use of SPV method (Simple Payment Verification). This only takes five seconds.
Despite the high level of security and good functionality, the Electrum Wallet does of course have disadvantages: For example, you have to accept that the wallet is very minimalist. In addition, it is not recommended to beginners that the user is not always intuitively and comprehensibly structured.
In addition, a major limitation for many: The Electrum Wallet only supports bitcoin as a coin. This state, as the only cryptocurrency in the wallet's offer, will be explained in more detail in the next chapter.
Electrum Wallet Coins & Currencies
Although there is now a huge range of crypto coins, the Electrum Wallet only supports the first and by far the most famous currency: Bitcoin. This also applies to Bitcoin forks such as Bitcoin Cash. Now you might ask why the wallet doesn't offer other coins? The reason is that the wallet wants to perform fast transactions and remain efficient.
The more coins offered, the greater the risk of losing these two advantages.
So while other wallets can store other cryptocurrencies and perform transactions with them, Electrum does not. Users cannot buy, sell or trade bitcoin within the wallet. If the user wants to trade their bitcoins, they must send their coins to a crypto exchange or wallet that supports trading.
However, what is entirely possible besides receiving bitcoin payments: transferring one's coins from another wallet to the Electrum Wallet. This is done by locating your receiving address in the "Receive" tab on Electrum. You can then transfer funds from the service provider you are currently using to your Electrum Wallet.
One note, however: although the Electrum wallet does not support Bitcoin forks either, users have split the Electrum software to support different BTC forks. One example is Bitcoin Cash: the wallet uses much of the same coding as Electrum, but has nothing to do with its original wallet.
While Electrum does not charge any fees for downloading, it does charge transaction fees. These are standardised fees when you want to send bitcoin from the wallet. The money ("network fee") is charged according to the amount of bitcoins one wants to transfer and there is a minimum fee.
With the service provider, there is a base rate - which is also a flat rate - of 0.2 mBTC. (One mBTC is one thousandth of a bitcoin.) However, this rate can be reduced to 0.1 mBTC and even further in some cases.
Electrum transaction fees are automatically included in the amount you want to send. If the total amount exceeds one's balance, the platform issues a warning to the user.
If the user wants a faster transaction, higher fees are charged or the users can raise the sum themselves. This puts the transfer ahead of others with lower Electrum transaction fees. This wallet stands out because there is no additional cost to the user per transaction.
As already mentioned, you can also accept BTC payments with the wallet. To do this, click on the "Receive" tab. The receiving address is more or less the Bitcoin address. Anyone who knows this address can transfer coins to you.
Regular BTC network fee
Electrum Features & Extras
Although the wallet is one of the more minimalist in the wallet world, you can read in many Electrum reviews that there are still a lot of extra features available. Important features of the Electrum Wallet are the external plug-ins such as the multisignature services and hardware wallets. Other attractive features include an invoicing function, encrypted messaging and transaction history tracking.
For beginners, for example, the quality of a forum where help can be sought is very relevant. This is where the Electrum Wallet can offer a solution: Not only is there an active "Bitcoin Talk Forum", but also "subreddit" for questions. A constantly updated support page also helps with a few dozen articles and other resources.
One asset of the wallet that should definitely be highlighted again is the integration option with the premium hardware wallets: these include the one from Trezor, Keepkey and Ledger Nano S. This guarantees double security, so to speak, because it solves security problems that desktop or web wallets usually have due to the connection to the internet.
Where to download the Electrum Wallet?
So where can I find the Electrum Wallet as a download? If you want to set up Electrum, you can either download it for free on the official Electrum page.
There, the download button is easy to find and you can choose the installation method directly afterwards. For mobile devices, the Electrum Wallet is available in the Google Play Store. It is important to emphasise that one does not have to buy Electrum.
As another variant, users of the hardware wallets Ledger, Trezor and KeepKey can use Electrum to store their coins.
Is the Electrum Wallet secure?
Those who pay attention to security in crypto wallets are in good hands with the Electrum Wallet. The features mentioned at the beginning already give a good impression of how much value is placed on security. It should also be mentioned that, on the one hand, the code is open source and, on the other, the programming language is Python: a popular language that can be well monitored by many community members.
This starts with the 2 factor authentication or multisignature option after the download. These extra precautions are meant to enrich the accessibility of Electrum. The platform works with decentralised functionality. As a further security measure, private keys are only stored locally on the user's own device.
The seed is also considered very secure by Electrum: the seed means about as much security as a private BTC key. As a reminder, the seed is so important because you cannot recover a forgotten or lost password without it.
It should be noted, however, that according to some Electrum experiences, there have been security breaches in the past: there have been cases where hackers have been able to steal funds from infected websites. It is always important to install the latest security updates in order to always be prepared against such dangers.
By the way, anyone who wants to pay attention to secure payment transactions outside of wallets should consider the payment service provider Paypal. It offers decisive advantages over credit cards and bank transfers in terms of security.
Electrum Wallet Test Conclusion - Our Evaluation and Experience
The conclusion of this Electrum review is that the wallet is generally recommendable. It is popular with the community mainly because of its security measures, as users have as much control as possible over their keys - and because it is quite traditional.
Although you don't have to buy Electrum, there are transaction fees. However, there are no other fees to fear with Electrum. Electrum's experience in terms of updates and further development also speaks for the wallet. Moreover, it is also quite easy for crypto newcomers to set up Electrum.
On the other hand, the wallet may be a deterrent for those who are not tech-savvy. There have also been the security problems mentioned in the past. A major drawback for crypto professionals is, of course, the limitation to bitcoin.
Of course, all in all, there is also the possibility to trade without a wallet at all. However, this is associated with a higher risk and you should inform yourself in detail about the offers of brokers and crypto exchanges before you entrust your assets to them. With the increasing number of offers, the number of black sheep among the stakeholders on the crypto market is also rising.
Our rating: Electrum is a solid wallet, but you can only store Bitcoin (and its hardforks). That is why we recommend using our test winner wallet from eToro in any case.
Electrum Wallet FAQs:
The Electrum Wallet is a desktop wallet. This means it can be used with your own computer or laptop. A mobile version is also available for download
In order to acquire cryptocurrencies, you go to an exchange of your choice. On Kryptoszene.de you can find all the information about the best-known crypto exchanges.
The platform scores with high security standards. Nevertheless, it is a desktop wallet, so residual insecurities could remain.
Yes, the Electrum Wallet is also available as a mobile wallet.