Electrum

The Bitcoin-only Wallet: A Guide to Electrum

Electrum is a software wallet for Bitcoin, which means it's a program that allows you to store, send, and receive Bitcoin. What makes Electrum popular, especially among beginners, is its simplicity and focus on functionality.

The Electrum wallet was made in 2011. It's like a lightweight tool for handling Bitcoin, making it easy for you to connect to external servers instead of having to download the whole Bitcoin history. Unlike other wallets, Electrum keeps things simple and packs in a lot of useful features, though it may not be as super user-friendly or fancy in its design.

It’s available for free download for Windows, Mac, and Linux computers. But let’s first take a look at some of its key features and how to get started with using it. 

Is Electrum newbie-friendly?

As a wallet, Electrum is simple and easy to use, but if you're new to Bitcoin, you might find it a bit tricky because it prioritises functionality over a fancy user experience. 

So, if you're a bit tech-savvy and already know a bit about Bitcoin, Electrum could be a good fit. It's not the most beginner-friendly, but it offers some advanced features, making it more suitable for experienced cryptocurrency users. Just a heads up, the setup process might require some prior knowledge about handling and storing cryptocurrencies. 

To help you get right into the thick of things, take Course 1 and 2 designed specifically to help you better understand crypto — if you’re completely new to it, here.

How do I set up an Electrum wallet?

Getting started with the Electrum wallet is a breeze – you can download, install, and set it up in just a few minutes. Don't worry if you're not a tech whiz; the installation wizard guides you through each step, making it super easy.

Here's a quick guide to help you set up and use the Electrum wallet on your desktop computer:

Step 1: Download the Electrum Wallet

Visit the Electrum website on your computer and download the wallet for Windows, Mac, or Linux.

Step 2: Install

Once downloaded, click "install," and the installation wizard will pop up. You'll be asked to choose the type of wallet you want, like a standard one or with added security features. But don't worry – the steps are pretty much the same for all options.

Step 3: Keystore

Decide if you want to create a new seed or restore a wallet using an existing one. You can also set up the wallet using a hardware wallet if you have one.

Step 4: Recovery Seed

If you're creating a new seed, you'll get a 12-word recovery seed. Write it down on paper and confirm it in the next window.

Step 5: Set Password

Secure your wallet by creating a password. Once that's done, your Electrum wallet is all set up and ready to roll.

How do I send and receive Bitcoin?

To receive Bitcoin

Use the "Receive" tab in Electrum to generate a Bitcoin address. Share this address with anyone who wants to send you Bitcoin.

To send Bitcoin

To send Bitcoin, use the "Send" tab and enter the recipient's address along with the amount you want to send. Review the details and confirm the transaction.

What about security - how safe is Electrum?

While Electrum isn't as Fort Knox-level secure as hardware wallets, it's no slouch. It's considered one of the safest software wallets out there. 

Just follow the best practices, add those extra layers of security, and your Bitcoin will be in good hands with Electrum.

The most crucial thing about any cryptocurrency wallet is keeping your digital assets safe. Security comes first, even before how easy or fancy a wallet is to use. Let's break it down:

Security Levels
Hardware Wallets: Most secure but less convenient
Online Wallets: Convenient but less secure
Electrum Wallet: Strikes a balance, offering both security and convenience as a software desktop wallet

Why Electrum is secure

Desktop Advantage

Unlike online wallets, Electrum stores your crypto on your computer, not on a central server that could be vulnerable to hacks.

Not as Secure as Hardware Wallets

But it's not as secure as hardware wallets since your computer, connected to the internet, can be exposed to malware. So, be cautious and keep your computer clean with a solid antivirus program.

Best practices with Electrum

Stay safe online
Avoid downloading suspicious files with malware.

Additional Layers of Security
Enable two-factor authentication for logging in and making transactions.

Create a multi-sig address, spreading permission for spending Bitcoin across different wallets.

Use hardware wallets to unlock your Electrum wallet, adding an extra layer of security while enjoying all of Electrum's features.

Built-in Encryption

Electrum automatically uses advanced encryption techniques to safeguard your private keys, protecting them from hacking, theft, or loss of your device.

What coins can I use with Electrum?

The Electrum wallet keeps things simple – it's like a specialist for Bitcoin (BTC) only. Even though there are tons of cryptocurrencies out there, Electrum stays true to its core and gives you a super safe and quick place to store your Bitcoin. So, if you're all about Bitcoin, Electrum is like a top-notch VIP experience just for your Bitcoin, making transactions speedy and efficient.

Is it true I can only store Bitcoin in my Electrum wallet?

Sadly, the Electrum wallet is limited to holding and moving Bitcoin around. You can't buy, sell, or trade Bitcoin directly in the wallet. If you're looking to trade, you'll have to send your Bitcoin to a cryptocurrency exchange or another wallet that handles trading.

In a nutshell, every wallet has its trade-offs, and it depends on what you value most in a wallet. If you're all about Bitcoin and want a secure and efficient experience, Electrum could be a solid choice for you.

Here are its main pros and cons as a recap:

Pros of Electrum

Security First
Electrum takes security seriously, keeping your Bitcoin safe with advanced encryption techniques.

Bitcoin Specialist
It focuses solely on Bitcoin, making it a dedicated and efficient wallet for BTC users.

Desktop Advantage

Unlike online wallets, your Bitcoin is stored on your computer, giving you more control and security.

Fast Transactions 

Electrum aims for speedy Bitcoin transactions, making your crypto dealings more efficient.

Feature-Rich

While keeping it simple, Electrum packs in useful features like two-factor authentication and multi-sig addresses.

Cons of Electrum

Bitcoin Only

If you're into other cryptocurrencies, Electrum won't support them. It's all about Bitcoin.

Not as Fancy 

It might not have the flashiest user interface compared to some wallets, but it gets the job done.

Not for Newbies

Beginners might find it a bit techy, especially with the initial setup and security measures.

Vulnerable to Malware

Like any software wallet, being on your computer means it could be exposed to malware. So, keep your computer clean!

No Built-in Trading

You can't buy, sell, or trade Bitcoin directly within Electrum. You'll need to use an exchange for that.

As always we took a test-drive around Electrum to experience its usability firsthand. Read about it in our review.