Electrum is one of the best cold storage wallets for anyone looking for a Bitcoin-ready wallet with top-notch security.
It offers a free and user-friendly Bitcoin storage solution, combining hot and cold storage for enhanced security. The wallet supports major hardware wallets like Ledger Nano S and Trezor. You can easily customize it to suit your personal wallet needs, and the fact that the wallet has been around since 2011 adds to its reputation for reliability and trustworthiness.
In this review, we will look at what Electrum has to offer, why it’s the oldest Bitcoin wallet and why you should consider using it as you stack your satoshis in preparation for the coming bull run.
Electrum Overview
The Electrum wallet is a good fit for anyone looking to store their BTC in a sophisticated wallet that combines the convenience of a cold and hot wallet. This non-custodial digital wallet is easily compatible with multiple hardware wallets. Since it’s one of the oldest BTC wallets in crypto, you can use a two-factor authenticator for extra security.
With Electrum, you get a non-custodial BTC wallet that uses disk space and bandwidth judiciously and enables easy and simple payment verification with every transaction.
Unlike most wallets, Electrum does not download the entire BTC blockchain on your device. It uses an alternative method that tracks your transactions by querying the server on the Bitcoin network. This method makes each transaction faster and easier to verify, even on mobile devices.
Ease of Use and Set Up
When it comes to the setup process, Electrum comes with a much more involved setup process. You must first select the type of wallet you want to create. The options are straightforward, even though some crypto newbies might have a steep learning curve. First, you must create a seed for the wallet you select.
By default, the Electrum wallet will create a Segregated witness wallet or Segwit wallet, which is a type of BTC wallet that supports transaction malleability, enabling the scalability of the Bitcoin network. You’ll also need to retype the twelve-world seed phrase to make sure you have it backed up in an offline format. Once your seed phrase is backed up, you can log in to the wallet and set it up to your liking.
By default, the wallet displays your BTC balance in millibitcoin or 0.001BTC as opposed to the common satoshis and bits. Be sure to also set up the display in your fiat currency of choice.
Can it Be Used with Multi-Signatures?
Yes, the Electrum wallet can easily be set up with MultiSig transactions as it supports the replace-by-fee (RBF) mechanism while also offering coin control features.
Is it Compatible with Hardware Wallets?
While the Electrum wallet comes as a non-custodial hot wallet, users can transfer Bitcoin to hardware wallets, providing an extra layer of offline security. The Ledger Nano series is recommended. You also have the option of downloading the wallet on an offline device, such as a completely offline smartphone, to achieve the cold storage features of the wallet. Even so, you can easily link the wallet to various hardware wallets with ease.
Security Features
With Electrum, you get to choose from multiple security options, including multi-signature, 2FA, or standard security for watch-only wallets, catering to different user preferences. For instance, if you want to store your BTC with the highest security feature, you might choose the multi-signature wallet, which allows you to divide access to your wallet among multiple private keys. This means that no single key can access your funds independently, providing an additional layer of protection against unauthorized access.
For users who prioritize a balance between security and accessibility, Electrum’s 2FA option offers an effective compromise. Two-factor authentication requires users to verify their identity through an additional step, typically involving a secondary device or code, adding an extra barrier against potential threats.
Additionally, if you prefer a more straightforward setup without compromising on security, the standard security option ensures a solid level of protection. This is particularly suitable for users who plan to hold their Bitcoin on an offline device or transfer it to a hardware wallet, offering security without unnecessary complexity.
Furthermore, Electrum’s commitment to keeping private keys secure is evident in its decentralized approach. Electrum never retains your private keys, preventing them from being a target for malicious attacks. Users are empowered with control over where their private keys are stored and who can access them, contributing to a safer and more resilient storage solution.
While Electrum has had security issues in the past, the proactive measures taken to address vulnerabilities and improve overall security make it a trusted option today. Users looking to fortify their security can combine Electrum’s features with a cold storage solution for a robust defence against potential risks.
Fees
Transaction fees with Electrum are calculated based on the size of each transaction, measured in satoshis per byte. This unique fee structure gives users granular control over their spending, allowing them to tailor transactions to achieve a desirable fee amount. It’s essential to understand that a satoshi is the smallest unit of Bitcoin, and one Bitcoin is equivalent to 100 million satoshis.
When initiating a transaction, Electrum users can customize the fee amount based on their preferences and urgency. The fees are essentially a measure of how much a user is willing to pay for the transaction to be processed promptly by the network. Users who are comfortable waiting for a longer confirmation time can opt for lower fees, potentially reducing their overall transaction cost.
Electrum’s fee flexibility is advantageous in situations where network congestion fluctuates. During times of high demand, users may choose to pay higher fees to prioritize their transactions. Conversely, during periods of lower network activity, users can opt for lower fees to save on transaction costs.
Is Electrum Right for You?
Electrum is a reliable choice for safeguarding Bitcoin with its blend of hot and cold storage options, user-friendly interface, and robust security features. Consider it if you prioritize simplicity, security, and customization in your Bitcoin storage solution. It is perfect for those seeking a secure, offline storage solution for Bitcoin with customizable security features. However, users with a diverse cryptocurrency portfolio may want to explore alternative wallets.
