Electrum Bitcoin Wallet – Review, Download, Fees and User Guide

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Electrum was created by Thomas Voegtlin in November 2011. Since then a number of developers have contributed to its source code to enhance its features, stability and reliability.

The Electrum wallet is a feature rich Bitcoin Wallet that can be be downloaded from

https://electrum.org

  • Electrum is a free software both as a client and a server software.
  • Electrum wallet is supported on a wide range of devices. It fits the requiremets and need of a large range of users.
  • For the mobile users it is available as Kivy and the desktop users can use the Qt version. It also supports text mode and command line for advanced usages.
  • Fast speed of loading and operation, Secure and ease of use makes Electrum the wallet of choice for a large number of users.
  • It incorporates a simple payment verification where in Electrum verifies the user transactions in the Bitcoin blockchain.
  • Electrum supports “Cold Storage” wherein the user signs transactions from a computer that is always offline and broadcast them from a machine that does not have the user keys.
  • Broadcast your message to a large Number of Bitcoin users by running a public Electrum server.When a user running the public server publishes his message it reaches thousands of Bitcoin users.
  • Added security can be implemented on the Electrum wallet by creating a 2 step authentication using Trustedcoin.
  • It supports Multisig where in the process of spending Bitcoins involves splitting the permission

to spend your Bitcoins between several wallets.

It is available for the following operating systems

  • Linux
  • Windows OS

Here it is available in 3 variants

– Standalone Executable

– Windows Installer

– Portable version

  • OS X

Executable for OS X can be downloaded from the site

From https://electrum.org/#download

The Electrum wallet supports 4 types of wallets that are

  • Standard Wallet
  • Wallet with two factor authentication
  • Multi Signature Wallet and
  • Watch Bitcoin address

Electrum wallet generates a 12 word “Seed” to secure your wallet and help in wallet recovery in case of system failure of your machine.

A Step by step Guide to install and use the Electrum Bitcoin wallet.

1. Download and install the Electrum Bitcoin wallet from https://electrum.org

The Windows version of the Electrum wallet can be downloaded as a Standard executable

Alternatively it can be installed as a windows installer

or a portable version of the Electrum wallet

For ease of understanding we would illustrate the standalone executable steps of the windows installer.

I) Download the installer from https://electrum.org/#download

Click save to your machine and remember the location.

Run the saved setup program. The following screen would Pop up (This screen is based on the security settings of your machine)

Click the Run button to start the setup process.

The next screen would look like the following. Keep the selection as Auto connect

Click the next button.

Optional Configuration: In case you wish to select the servers manually you can do so by selecting the lower radio button next to Select Server Manually

It would pop up the following screen

From here you can select the servers of your choice by un-checking the select server automatically check box

End of Optional Configuration.

The Next screen Prompts you for a wallet selection.

You can select one of the 4 wallet types namely

– Standard Wallet

– Wallet with two factor authentication

– Multi Signature Wallet and

– Watch Bitcoin address

Click the Standard wallet option and click the Next button this leads you to the following screen. For creating Wallet with two factor authentication, Multi Signature Wallet and Watch Bitcoin address their respective radio buttons need to be selected. (Specific instructions for these wallets have been listed after the procedure of the standard wallet.

Click the Next button and it would lead you to the following screen

The wallet generates a 12 word phrase called a “seed” Note it on a paper and save it for future reference. In case you were to lose your wallet due to computer failure you would need this information to recover your wallet.

An important thing about saving your wallet seed is that

You Must

  • – Never disclose your seed.
  • – Never type it on a website.
  • – Do not store it electronically.

Click on the next button an it takes you to the following seed confirmation screen

You need to type the seed that you have noted down from the previous screen exactly as it appeared only then the Next button would become click able.

Click the Next button to bring up the password selection screen

Enter a password of your choice and confirm it. (Note down the password and store in a safe place)

Click the Next button.

This leads you to a wallet generation screen that leads you to the Electrum wallet main interface which looks as follows.

Upon loading, the wallet displays the “History Tab”

Send Bitcoins

To send Bitcoins click on the Send Tab of your wallet.

  • – In this interface you can enter the recipient’s Bitcoin address in the pay to field
  • – Description Field lets you write a payment description.
  • – Enter the amount to be sent in the Amount Field

-Select a Fee by dragging a Fee selection Bar. If you drag the Bar to the right the fee goes up and as a result your Bitcoin sending transaction would be confirmed in the next Bitcoin block. If you choose a lower fee by dragging the bar to the left then your transaction confirmation would change from the next block to up to within the next 25 blocks for the lowest Fee band that is the extreme left corner.

In case you do not want to use a dynamic fee feature then you can click on Tools > Preferences

This leads you to the Fees option

Un check the box Use dynamic fee box

This lets you select a fee in terms of Transaction fee per kb

you can also change the Bitcoin units by accessing Tools>Preferences and then clicking on the appearance tab and modify the drop down menu next to Base unit.

Pay to Many Feature of the Electrum Wallet.

This feature can be accessed from Tools>Pay to Many

This function lets the wallet user enter a list of Bitcoin addresses that need to be paid out.

Receive Bitcoins. To receive Bitcoins click on the Receive Bitcoin Tab. This displays the receive Bitcoin address and the corresponding QR code. You can add a description.

You can also set the expiry for your Bitcoin request

Contacts

You can view all your contacts from the contacts tab.

A new contact can be added by clicking on the Wallet > Add Contact menu from the top file menu.

You can add a Bitcoin address and a corresponding name into the form menu

Console

You can access the console by clicking the Console Tab.

Communication

Use the Tools menu to Sign/Verify message as well as Encrypt/decrypt message

As a user of the Electrum wallet you can enable a number of plugins from the Tools> Plugins menu.

You can enable the desired plugin by selecting the corresponding check box as shown in the window below.

Installing a 2 step authentication wallet

To install a two step authentication wallet Run setup program

When you get the following screen

Select the wallet with two-factor authentication and click next

Click OK to setup the wallet with 2 factor authentication.

The user coins are secure even if TrustedCoin is compromised or goes offline. The users coins remain secure as long as he has the seed with him. The seed contains 2 of the 3 private keys in a security system that works on 2-of-3 security scheme.

Restoring the wallet in two factor Authentication wallet

To restore the wallet from seed the user must select

“Wallet with two factor authentication” This would tell Electrum that it should use the special variety of

seed for restoring the users wallet.

Note: You should use the “restore” option only when you do not wish to use the TrustedCoin service. This restoration process negates the special protection offered by the TrustedCoin service after you have used the two of three factors present on your machine.

Creating Multisignature Wallets

A 2 of 2 Multisignature Wallet would comprise of 2 separate wallets.

Usually the 2 wallets are stored on 2 different machines and controlled by 2 different people.

The way 2 of 2 Multisignature Wallets function is that they have to be in conjunction in order to access the funds.

The addresses present in both wallets are the same.

Why would a person need Multisignature Wallets?

A typical use is when 2 different users need to assign equal rights over a sum of money. If 2 partners run a business and they can spend the money when both the partners agree.

Another scenario is adding an added degree of security to the Bitcoin money. One wallet can be on a machine that is online and the other wallet can be on an offline machine.

This way it would be difficult for an attacker or malware to rob the user of his hard earned Bitcoins.

To create a pair of 2-of -2 wallets

Each of the 2 user needs to access the wallet and go to

File>New> Then select Multi-signature wallet from the next screen.

On the above screen, select 2 of 2. After the seed is generated note it down and keep it safe and secure as it is your key to access your funds if you were to lose your password. Anyone who has your seed can access your funds so do not share it with anyone.

You need to enter the master public key of the other wallet.

Enter the master public key of the other wallet into the lower box. Correspondingly enter the master public key of the first wallet in the corresponding field of the second wallet.

Receiving Bitcoins in Multisignature Wallets

Once the Multisignature Wallets are created they would have the same addresses in both wallets. The addresses would start with a “3”

A user can send Bitcoins from any wallet to this wallet that can send to P2SH addresses.

Spending with Multisignature Wallets

To spend Bitcoins from this wallet both the cosigners would need to sign the transaction.

For spending Bitcoins

Create a transaction using 1 of the 2 wallets by filling the form found under the send tab.

After signing, a window comes up with transaction details.

This transaction needs to be send to the other wallet.

You can do this in one of the following ways

-Transfer file through a USB drive.

Save partially signed transaction to a file using the “save” button. transfer it using a USB drive to the

machine running the second wallet.

On 2nd machine use Tools>Load Transaction >From file option

-Use a QR code

Use Tools>Load Transactions > From QR code menu to load transaction in the second machine.

-Use a remote server, with the CosignerPool plugin.

First enable the “Cosigner Pool” plugin from tools> Plugins within both the wallets.

After enabling the pluging you will get an option to click a button “Send to cosigner”

Click this button. This sends the partially signed transaction to a central server. This transaction is encrypted with your cosigner’s master public key.

Starting the cosigner wallet will give the notification that a partially signed transaction is available.

This transaction is encrypted with the cosigner’s master public key and the password is needed to decrypt it.

In all the above methods, you can now add the second signature to the transaction using the “sign” button. It will be broadcast to the network.

Creating an offline wallet that holds the Bitcoins and a watching only online wallet.

The Watching only online wallet is used to view the history and to create such transactions that need to be signed with the offline wallet before being broadcast on the online wallet.

First create an offline wallet by going to file >New > Hardware Wallet

Click Next and follow the instructions as done in creating a wallet earlier.

After the wallet gets completed go to Wallet> Master Public Keys

This would bring up the below mentioned window that would be displaying the Master Public Key as a string. Transfer this to your online machine.

To Create a Watching only version of the wallet

Open the Electrum on the online machine.

Go to File> New/Restore

Enter a name for the wallet and select “Restore a wallet or import keys”.

Click the next button. In the next window paste your Master Public Key

Click next and complete the wallet creation process.

You would get an information pop up window saying that you are opening a watching-only wallet.

“send” tab on your online watching-only wallet, input the transaction data and press “Send

A pop up window would open up. This would inform you that a transaction fee would be added.

Click the Save button and save the transaction file on this computer. Use a USB drive to transfer this file to the offline machine.

Next we need to get the transaction signed.

Open the offline wallet if not already open. Go to Tools> Load transaction > From file

Load the transaction file that you had created in the previous step.

Click the Sign button to sign the transaction. The result is that a transaction id appears in the corresponding field.

Click the Save button to save it on this machine then transfer it back to the online computer.

Next you are required to broadcast the transaction.

For this go to Tools > Load transaction > From File

Select the signed transaction file. In the window that opens, select Broadcast. This causes the transaction to be broadcast over the Bitcoin network.

Simple Steps to install the Electrum wallet on a linux machine.

Install dependencies:

sudo apt-get install python-qt4 python-pip

Install Electrum:

sudo pip install https://download.electrum.org/2.7.11/Electrum-2.7.11.tar.gz

Installation of Electrum from Python sources

For LinuxDownload and untar Electrum-2.7.11.tar.gz

In the electrum directory, run: ‘python electrum’

To install it on your system, run: ‘sudo python setup.py install’

For Windows

Install PyQt4

Install Electrum-2.7.11.zip

In the electrum directory, run ‘python electrum’

For OSX

Install Homebrew

Install dependencies ‘brew install qt pyqt gettext’

Install Electrum-2.7.11.zip

In the electrum directory, run ‘python electrum’

1 Comment on "Electrum Bitcoin Wallet – Review, Download, Fees and User Guide"

  1. I just got hacked moving my Bitcoins from another wallet into Electrum Bitcoin Wallet. Merry Christmas huh? To bad I have to use this forum to express my outrage but trying to contact you’all in any sensible way is impossible.

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