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2011 was a big year for the insurgence of trading cryptocurrencies online. It was also the year German computer scientist Thomas Voegtlin created the fast, efficient, and safe to use Electrum Wallet to store and support the popular Bitcoin cryptocurrency. Presently, there are over 900 cryptocurrencies on the market and since the inception of buying and selling the original cryptocurrency Bitcoin began in 2009, the world of online cryptocurrencies has exploded in value and popularity. The Electrum Wallet joined the scene at the time Bitcoin was valued at only a few dollars.
You will see why this wallet is a top choice for cryptocurrency enthusiasts. Using it is not only functional, but it is fast with advanced security features, and the software itself is free to download and is written with open source code.
If you are a Bitcoin trader who is used to the world of cryptocurrencies, then trying the Electrum Wallet is the perfect Bitcoin storage and support wallet just for you! While trading cryptocurrencies, keep in mind that for storing small amounts of Bitcoin, it is okay to use handy desktop wallets such as Electrum. Because of the connection to the internet, however, desktop and mobile wallets are considered hot wallets and less secure but Electrum’s increased security features mitigates that and serves as a cold wallet instead.
If you are trading large values of Bitcoin and need the ultimate in safer storage, then always use cold storage such as a hardware wallet or a paper wallet. As a Bitcoin investor, using a wallet that is right for your needs and more importantly, limits your Bitcoins from getting stolen are top concerns. The Electrum Wallet “suits the needs of a wide spectrum of users” as it offers functionality with speed and security to boot.
About the Electrum Wallet
The Electrum Wallet has multiple user interfaces and is accessible on a desktop client, mobile, and with the computer command-line interface. Downloading the software is free on the electrum.org website and the compatibility is no problem across multiple operating systems such as Windows, Mac, and Linux. In addition, the Android mobile app launched in 2016.
How Do I Use Electrum Wallet?
Getting started is super fast and easy. To download the Electrum Bitcoin Wallet simply visit the Electrum website at electrum.org and click either the “Download” tab or button. After clicking “Download”, you will be able to pick the installation method and after a few more clicks, Electrum is ready to open and use! You can receive Bitcoin payments and transfer Bitcoins to your new Electrum wallet from a different wallet. This is done by clicking the “Receive” tab in Electrum and finding your Bitcoin receiving address.
This allows you to transfer Bitcoin cryptocurrency from your current source into your “unfunded” Electrum Wallet. Now that you have currency in your wallet, you can make or receive payments. In Electrum, making a payment is as simple as clicking the “Send” tab, then filling in the “Pay To” field with the Bitcoin address that is hand typed or copied from the clipboard. When you click “Send” a security feature will prompt you to type in your password that you created to sign into Electrum.
Also, the Electrum wallet can receive funds in the form of Bitcoin cryptocurrency. This is possible by clicking and opening the “Receive” tab where your Bitcoin address acts as your receiving address. This allows anybody who wants to send you a payment to do so by knowing your Bitcoin address.
Features of Electrum Wallet
Simplified Payment Verification (SPV)
Electrum Wallet desktop and mobile operates with a Simplified Payment Verification (SPV). SPV is a “Bitcoin protocol” feature with implementation usually in wallets. It creates wallets to be lightweight or “lite” meaning they can operate without the need to download the entire blockchain. Blockchains are transaction verifications and instead of getting the full copy of it, the SPV relays the transaction information from other network computers. This allows SPV wallets to be installed on space-limited devices such as mobile phones and tablets.
Open Source Code
Electrum Wallet is open source where developers can offer their contributions of reviewing, editing, and composing the code. These features drastically limit the occurrence of malicious code in the software to next to zero. This is especially important when dealing with software that involves money. A software program that is closed source allows developers the opportunity to insert code that is potentially malicious or harmful.
Open source code mitigates this by allowing developers to review and check each other’s work, thus minimizing the risk of malicious code. Allowing Electrum Wallet’s code to be open source is what makes it such a trustworthy wallet.
Integration with Hardware Wallets and Multisig Services
Additional safekeeping features are third-party plug-ins that are supported with the Electrum Wallet such as integration with hardware wallets and multiple signature permission, also known as multisig services. Electrum Wallet is integrated and compatible with the premium Bitcoin hardware wallets such as KeepKey, TREZOR. and Ledger Nano S.
This is a core feature for Electrum Wallet as an added security benefit since hardware wallets are considered cold storage or storage offline. The Electrum key feature of cold storage for a desktop wallet means private keys are kept offline and your wallet is watching-only when online.
The multisig service is another safekeeping feature that allows the permission to be split among multiple people or accounts in order to spend Bitcoins between several wallets. It is used as a safeguard against theft with extra security protection of your Bitcoins and accepts 2 of 3 signatures to proceed with the Bitcoin transaction.
Security, Costs, and More
Safety: Private Keys and Encryption
Using a desktop wallet such as Electrum is safe because it involves the private key being stored on your hard drive. The private key is for how Bitcoins are allowed to be spent and is a long and secretive number. Private keys are generated from Bitcoin addresses based on a mathematical relation. In addition to Bitcoin private keys, Electrum has “highly secured seed” which is just as secure.
Electrum seed is another layer of protection and “is the random phrase that is used to generate private keys.” Electrum is safe to use for storing and supporting your Bitcoins because of the encryption techniques of your private keys. This means that they are securely on your computer and will never leave. Your Electrum seed proves useful, too, as it is the only measure used to recover a forgotten password. The password is critical in opening the Electrum Wallet and sending Bitcoin payments and transactions.
Security: Two-Factor Authentication
Electrum Wallet uses two-factor authentication by both Electrum and TrustedCoin for an extra layer of security and to be safe from malware. This can be signing into Electrum with a username and password and then a second authentication feature from Trusted Coin which is a multisig wallet feature where you own 2-of-3 keys.
This double protection is ensured even in the event TrustedCoin is taken offline or compromised you can still access your wallet as long as you have your seed which contains the two master private keys for a 2-of-3 security authentication scheme. Your wallet addresses can be restored by deriving the third master public key from your seed. This is called restoring your wallet from seed and can be done by selecting “wallet with two-factor authentication” as this will allow Electrum to restore your wallet using this special kind of seed.
Cost: Transaction Fees
Electrum Wallet is free to download, but it acts as a service provider and charges a transaction fee every time you send Bitcoin at a flat rate of 0.2mBTC (millibitcoin). This default fee can be lowered to 0.1mBTC or less in certain cases. This transaction fee shows up in the summary of how many Bitcoins you want to send, and Electrum will warn the user if the sum transaction amount exceeds the balance of your wallet.
Sometimes the Bitcoin network becomes crowded and your transaction won’t initially go through or confirm causing transaction fees to climb. Electrum uniquely lets you replace the high transaction fee you have set to one that has already been broadcasted. Only a few wallets do this, Electrum is one of them!
Overall, the Electrum Bitcoin Wallet is a highly secure and functional desktop wallet for storing and sending Bitcoins. Using Electrum is widely acclaimed and accounts for an estimated 10 percent of all Bitcoin cryptocurrency transactions. Because it is focused solely on the Bitcoin cryptocurrency, the Electrum Wallet is fast, efficient, and effective with Bitcoin transactions. It is a favorite desktop wallet among cryptocurrency beginners and experts alike and is a veteran wallet that started on the cryptocurrency scene online almost immediately after Bitcoin’s inception nearly 10 years ago. It is a service provider that truly provides service and security first. With low, flexible transaction fees and being open source code software, Electrum puts the investor and developer in the driver’s seat. The world of cryptocurrency is expanding rapidly and becoming worthy of everyone’s attention and investment. Electrum Wallet is a desktop wallet worthy of our attention and investment, too.
Featured Image Source: Electrum.org