Electrum Wallet Review

Electrum is one of the founding fathers of cryptocurrency software wallets. Launched on November 5, 2011, the wallet is a lightweight Bitcoin client, which is to say that it interfaces with Bitcoin’s network without its users having to download the blockchain by running a full node. This Electrum wallet review will walk you through everything you need to know about the Bitcoin client.

From its inception, Electrum was built exclusively for Bitcoin. A different time and a different market, it was created when Bitcoin had few serious competitors and Ethereum creator Vitalik Buterin was still in high school.

Thankfully, though, the client’s technology is completely open source, so with the help of a community of active developers, clones have surfaced for the likes of Litecoin, Bitcoin Cash, Dash, Verge, Monacoin, Vertcoin, and other currencies.

As its open sourced evolution suggests, Electrum keeps with Bitcoin’s decentralized roots. This has made it a favorite software wallet for early adopters and series enthusiasts, as it features the following attractive traits:

  • In-wallet encryption (honestly this is a bare-bones feature at this point in the game, something holders should come to expect from a wallet client software)
  • Two factor authentication option (another expected feature)
  • Multi-signature wallet option
  • Hardware wallet integration
  • Seed recovery phrases for if you lose access to your wallet
  • As a lightweight client, its functionality isn’t limited by Bitcoin’s network
  • Private keys are kept on your personal device, and they are never shared with the wallet’s servers
  • In addition, servers do not store user accounts or their information, you can migrate between servers at will, and you can export your private keys freely
  • Electrum does not download scripts, meaning you’re insulated from hackers sending you codes through these servers to steal your funds
  • Being open source, anyone can run a client, and this decentralization protects it from a central point of failure
  • Now that we’ve gone into the wallet’s background and some of its key features, let’s dive into the thick of what makes it tick.

Setup and User Interface

Electrum offers excellent installation flexibility. If you’re tech illiterate like myself, there’s an easy installation feature, or if you’re tech savvy and plan to develop on Electrum–then well, you probably don’t need this guide to begin with, but there’s a Python source installation for people like you, as well.

The installation is about as easy as they come. When creating a new wallet, the installation wizard will ask you if you want to make a standard wallet, a two factor authentication wallet, a multi-signature wallet, or import an existing wallet. We highly recommend that you consider the two factor or multi-sig option, as it insulates your funds from hacking attempts even further.

Electrum Install Wizard

No matter which option you choose, though, you’ll come to a window asking about seed phrases (if you do the standard setup, this window is the very next one, but if you choose the two factor or multi-sig setups, you have a few steps before you get to it). This window will ask you if you want to restore a wallet using an existing seed or create a new one with a seed, a master key, or a hardware wallet.

Electrum Install Wizard

For simplicity’s sake, we’re going with create a new seed for this review. After choosing this, it’ll ask you whether you want to use a standard or segwit wallet address–choice is yours–then, a recovery seed will show up. The next window asks you to reproduce this recovery seed, but make sure you write it down as it the only thing that will save your precious Bitcoin from the blockchain’s encrypted labyrinth of hash functions if you lose/delete your wallet’s software client. Everyone shudders at those horror stories of unawares Bitcoin users losing thousands to careless errors, and wouldn’t it be a shame if little Timmy’s college fund was irretrievably lost in cyber space because you didn’t save your wallet’s seed phrase?

Don’t disappoint little Timmy; write down your seed phrase and keep extra copies.

Anyway, after you reproduce the seed, you’ll then be asked to give your wallet a password. Again, make it a good one and don’t treat this step lightly–do it for Timmy. After setting your password, you’re all set.

Electrum - Default Wallet

The first thing you’ll likely notice about the Electrum wallet is that it’s pretty minimalistic. No bells and whistles or a flashy UX like Exodus, for instance. Still, what it lacks in flair, Electrum makes up for with good ole roll-up-your-sleeves-and-get-to-work functionality. It includes an invoicing function, a contacts list, encrypted messaging, and transaction history along with your typical wallet features. Overall, it has a smooth layout navigable, it’s fast, and it’s easy to use, so if this is your first foray into Bitcoin, it’s a simple place to start.

Security

As we went over in Electrum’s key features, the wallet is replete with some staunch security features. With options to create a two factor authentication or multi-sig address, users can give their wallet an added layer of protection from hackers. These are extra precautions that exist to complement Electrum’s overall decentralized approach to functionality; ultimately, two factor and multi-sig wallet options and the fact that private keys are kept on local devices means that users are truly in control of their funds from the get-go, and all of these features facilitate an overall airtight security system.

With one recently patched exception, that is. I won’t go into too much detail as it’s been explored in detail elsewhere, but basically, Electrum used to have a vulnerability that would allow hackers to steal funds through infected websites. Essentially, if you logged into your Electrum wallet while an internet browser was on a website controlled by hackers, you could have your wallet drained of its coins.

To date, this is the only security vulnerability Electrum has faced, and for what it’s worth, the team has patched it with an updated version. If you use Electrum, make sure you update your software, as it doesn’t support automatic updates.

Community Sentiment

Even with the recent hiccup in security, the cryptocurrency community in general holds the Electrum wallet in high regard. It’s one of the oldest and most well known, and this reputation has made it a favorite among veteran enthusiasts, especially those who are more technologically inclined. A number of cryptocurrency information websites consider it to be one of the best options for software wallets, as well.

Overall, Electrum seems to have secured the community’s trust even in the face of its failures. This is largely thanks to the team’s commitment to improvement, especially when security and user control are concerned.

Support

Need help managing your wallet? No worries here. Electrum sports an active Bitcoin Talk forum and subreddit for questions. In addition, the team keeps an updated support page that offers several dozen articles and resources.

All of this to say, if you have a question, chance are that the Electrum team has it answered for you.

Final Thoughts

The Electrum wallet is one of the most developed software clients out there. With nearly 9,000 commits on Github, an expansive developer community, and third party plug in support, it’s a sandbox for add-ons and development. Its open source flexibility and developer following have given way to off-shoot clients for popular altcoins.

All in all, Electrum’s esteem in the space as one of the oldest wallet clients, its security features, and its developers’ commitment to building on and improving the software make it a win in our book. It may not be the prettiest wallet, but you’d be hard pressed to find one that gets the job done more efficiently and with its user in mind than Electrum


This article by Colin Harper was previously published on Coincentral.com

About the Author:

Colin Harper is a freelance writer and crypto-enthusiast based in Nashville, TN. When he’s not speculating crypto futures, he’s probably letting his hair down and/or heading to a music festival–because stereotypes exist for a reason.


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Allright, You Want to Start Cryptocurrency Trading?

Well, you’ve come to the right place. Getting started with cryptocurrency trading can be a daunting task. You may be wondering, “What wallet should I use? Where do I buy Bitcoin? What even is a Bitcoin?”

Worry no more. We’re here to provide you with all the information you need to learn how to begin your cryptocurrency trading adventure.

What’s Your Strategy?

Before even looking at potential cryptocurrencies, you should figure out which strategy you want to pursue. Everyone has their own tactics, but they generally fall into one of the following categories:

  • Long-term hodler – You just want to buy a few different coins and keep them as a long-term (>1 year) investment. This is the simplest trading strategy and usually involves the least amount of risk. You’ll most likely stick to cryptocurrencies with a larger market cap.
  • Mid-range investor – You have a slightly higher risk tolerance than the long-term hodler. There may be coins you hold for awhile, but you also rebalance your portfolio every month or so. Your holdings probably include a mixture of large and medium market cap coins.
  • Daytrader – The most advanced and riskiest cryptocurrency trading strategy. You focus mainly on technical analysis to trade volatile swings in the market. This can be lucrative if you do it properly, but it’s difficult to execute well. All coins are fair game with this strategy.

Your strategy can be some mixture of these three tactics as well. If you’re just starting with cryptocurrency trading, we recommend you stick with the first two.

Choose a Cryptocurrency

It may seem obvious, but you need to put some effort into choosing the cryptocurrencies you invest in. Take your time with this. There will always be new opportunities, so don’t just jump into a trade in an attempt to catch a pump.

Research, Research, Research

Did we mention research? The most important step of every investment opportunity is to research the coin you want to buy. Doing this one step will set you notably ahead of many other investors out there.

At the very least, you should figure out what problem the coin is solving, why the team is qualified to create it, and what purpose the coin has in the overall ecosystem.

Reading the coin’s white paper is a great way to gather all of this information. These documents may seem intimidating, but after reading the first couple, you’ll find that they aren’t so bad. The Bitcoin white paper is the perfect starting point for any cryptocurrency novice. Check it out and learn what started the whole blockchain revolution.

After proper due diligence on your coin (or ten coins), it’s time for you to make the investment.

Find an Exchange

There are a seemingly endless amount of exchange options. Each one consists of pros and cons for different traders as well as different lists of available coins.

When finding an exchange, it’s important that you first see if it supports the coins you want to trade. Most exchanges have an easy-to-find page that lists all of the available coins. We’ve also compiled a list of tradeable cryptocurrencies on the most popular exchanges here.

Beginner Exchanges

If you’re a beginner interested in sticking to the most well-known cryptocurrencies, Coinbase is your best bet. Ever so slightly more advanced, GDAX and Gemini offer similar coin selections with lower trading fees.

Kraken has similar ease-of-use as the previously mentioned exchanges but consists of a larger list of coins.

You can purchase cryptocurrency with fiat (i.e. USD) on all of these platforms.

cryptocurrency

Moderate Exchanges

These platforms support a wider array of coins than the beginner exchanges and usually have lower fees as well. However, this comes at the expense of user experience.

None of these exchanges allow you to use fiat to purchase crypto. You need to have already owned or first purchased Bitcoin or Ethereum on one of the beginner exchanges.

Reputable exchanges in this list include Binance, Bittrex, and KuCoin.

Decentralized Exchanges (Advanced)

As you become a seasoned cryptocurrency trader, you may find yourself trading small market cap coins. Most of these coins aren’t available on centralized exchanges. Instead, you have to use an Ethereum-powered decentralized exchange (DEX).

On these exchanges, you trade directly on the blockchain. There’s no intermediary to match orders. You use a tool like MetaMask to execute your trades. Once again, decentralized exchanges are only recommended for experienced traders.

If this is something that interests you, Ether Delta and IDEX are two solid DEXs to check out.

Select a Wallet

Finally, and most importantly, you should have a secure wallet if you plan on holding your coins for an extended period of time. Once again, you have plenty of options for storage.

Exchanges

Exchanges are by far the least secure place to store your funds. They’re common targets of hackers and are susceptible to phishing attacks. If you do plan on leaving your money on an exchange in order to have some trading liquidity, make it the least amount possible.

Online Wallets

Online wallets are your next best option. These are slightly better than exchanges, but since they’re still online, they have many of the same vulnerabilities. Even a reputable wallet like MyEtherWallet has recently proven that malicious players will always find a way to circumvent the system.

Software Wallets

Even better than online wallets are software wallets. Many of these wallets store your information locally on the device you download it to. However, if your computer or phone catches malware, it could compromise your security. Exodus and Edge are two popular software options.

Hardware/Paper Wallets

Ideally, you should use a hardware or paper wallet for storage. Both methods keep your coins offline and provide the highest level of security. Paper wallets are free, but hardware wallets typically cost around $100. The price tag brings enough security to make them worth it, though. The Ledger Nano S and Trezor are the top hardware wallet picks.

Ledger Nano S

Get Out There and Start Trading

Those are the basic steps you need to follow in order to begin cryptocurrency trading. From there, it’s a lot of trial and error and learning as you go. If you’re itching for more information, check out the guides on the common mistakes to avoid when trading as well as how to evaluate a coin.

This article by Steven Buchko was previously published on Coincentral.com

 

About the Author:

Steven Buchko is a managing editor at Coin Central and a blockchain investor. He’s also the co-founder of Coin Clear, a mobile app that automatically turns your daily spending habits into cryptocurrency investments.


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Coins, Coins Everywhere

When starting cryptocurrency trading, the vast number of coins to choose from can be overwhelming. From the thousands out there, how can you possibly decide which few to keep in your portfolio?

Although there are an endless amount of strategies when choosing coins, there are a few different tactics you should follow to minimize your risk. In this guide, we’ll teach you the tips and tricks on building your portfolio, so you have a more successful cryptocurrency trading experience.

Diversify Across Market Caps

A great way to minimize your downside risk when cryptocurrency trading is to diversify your holdings across different market caps.

In case you don’t know, the market cap of a cryptocurrency is its price multiplied by its circulating supply. Usually, the higher the market cap of a coin, the less volatile it is. A properly diversified portfolio contains a mix of large (>$5 billion), medium ($250 million to $5 billion), and low (<$250 million) market cap coins.

Large market cap coins like Bitcoin and Ethereum may not experience the same 40-50% runs that smaller altcoins do, but their price typically holds better in bear markets.

How you diversify among these classes depends on your risk tolerance. If you think that investing in cryptocurrency is already a gamble, a portfolio that consists 95% of large-cap coins may be appropriate for you.

Maybe you have disposable income, though, that you wouldn’t be too upset losing. In that case, it may be worth putting over half of your portfolio in small-cap cryptocurrencies. Coins in this class have a high probability of being worth nothing down the road, but the ones that end up growing 100-200x could make the risk worth it.

In the end, you should do a serious evaluation of your risk tolerance as well as the amount of money you’re willing to lose and choose your market cap split based on that.

Consider the Industry

Another thing to consider when building your cryptocurrency portfolio is the industry that each coin is targeting. There are a couple of different ways you can approach this.

Diversify Across Industries

Once again, diversity is key. Because blockchain is still young, it’s difficult to predict which sectors will be most accepting of the new technology. To hedge against this risk, it’s recommended that you invest in coins across different industries.

You can group the most popular cryptocurrencies into a few different categories:

These are just a few of the categories in which you can place coins, and you’ll quickly find that there’s plenty of overlap for some of them. The idea of this strategy is to avoid investing too heavily in any one category. If for some reason that category ends up bombing, you don’t want to be left holding the bags.

Bitcoin TradingDouble-down on Your Favorite Industries

Even when holding coins across a diverse set of industries, you should consider putting additional capital in the industries that you’re most confident in.

There’s a popular notion in the cryptocurrency industry that only one coin per category will win out. But, that just isn’t the case. Take a look at any other business sector. Delta, American, Southwest (airlines), AT&T, Verizon, T-mobile (cell carriers), Chase, Wells Fargo, Bank of America (financial institutions) – and the list goes on and on. People have their preferences and categories are large enough for multiple cryptocurrencies to survive.

For example, if you think blockchain and file storage is inevitable, you may invest in Sia, Filecoin, and Storj. Or, if you’re a big believer in supply chain projects, VeChain and Waltonchain could take up a considerable amount of your portfolio.

Look for Hidden Gems (if you have the time)

The best coins to have in your portfolio are oftentimes the ones that not many other people have. There’s wisdom in going against the crowd.

Finding coins that haven’t haven’t become popular yet is a time-consuming process, though. It usually involves days (or even weeks) of research and slogging through a bunch of white papers. Even reviewing fifty projects may only lead to one or two that you deem worthy to invest in.

However, these one or two coins could be the key to an uber-successful portfolio. Let’s look at some examples:

  • Early investors in AntShares (now NEO), have seen ~160,000% return on their investment.
  • An investment in Bitquence (now Ethos) would have brought you a 4,300% return.
  • And, your portfolio would’ve grown by almost 4,000% by finding OmiseGO early.

As you can see, there’s immense value in finding coins early. If you have the time to research and enough money to take the risk, it could really pay off.

Cryptocurrency Trading is All Trial and Error

As you build out your cryptocurrency trading portfolio, you’ll probably find other tactics that also fit in well with your trading strategy. Additionally, you’ll most likely try out advice that sucks. You may even find that you don’t agree with the tips listed here.

And, that’s okay. Becoming a cryptocurrency trader is a learning process, and each investor inevitably molds their own unique style as they become more experienced. The important thing to remember is to keep an open, yet skeptical, mind and enjoy the ride.

This article by Steven Buchko was previously published on Coincentral.com

About the Author:

Steven Buchko is a managing editor at Coin Central and a blockchain investor. He’s also the co-founder of Coin Clear, a mobile app that automatically turns your daily spending habits into cryptocurrency investments.

How to Buy Animecoin (ANI)

Animecoin has been around since 2014 but has been fairly inactive until now. A new team has resurrected the coin from the dead bringing its price to life along with it. With these changes happening so recently, you’re only able to buy Animecoin from one exchange: Cryptopia.

In this article, we’ll walk you through the steps you need to take to buy Animecoin (ANI) using Cryptopia. If you’d like to learn more about the project, you should check out our Animecoin beginner’s guide. Without further ado, let’s begin.

First Things First

Before setting up an account on Cryptopia, you need to purchase Bitcoin. Cryptopia is purely a cryptocurrency exchange, so you’re unable to trade using fiat (e.g. USD). Cryptopia also offers Animecoin as a trading pair with Litecoin and Dogecoin, but the trading volume is so low that you may have trouble making the purchase.

You have numerous options to choose from when purchasing your Bitcoin. Coinbase and GDAX are great exchanges for beginners. If you need help with this process, follow alongside our Bitcoin buying guide.

Once you’ve purchased some Bitcoin, set-up an account on Cryptopia (instructions below).

Cryptopia Account Registration

Step 1. Navigate to the Cryptopia website.

Step 2. Click “Register” in the upper righthand corner of the page.

Cryptopia Registration

Step 3. On the next screen, follow the instructions to enter your account information.

Cryptopia Account

Step 4. After submitting your information, you’ll receive an email to confirm your email address.

Step 5. Click the link in the email to confirm, and you’ll see a confirmation message.

Cryptopia Email Registration

Step 6. After clicking “click here”, you’ll see a login page.

Step 7. Once you successfully enter your login credentials, you’ll most likely have to enter a code for 2-factor authentication. Check your email for this code.

Cryptopia Two Factor Verification

Step 8. Enter the code, click “Verify”, and you’re in!

Sending Bitcoin to Cryptopia

Step 9. Once logged in, click “Exchange.” You have two options for this.

Cryptopia Exchange

Step 10. In the exchange, hover your mouse over the Bitcoin logo next to your username and click “Deposit.”

Cryptopia Deposit

Step 11. Choose “Bitcoin (BTC)” from the drop-down, and click “Next.”

Cryptopia Deposit Drop-down

Step 12. The next page shows you your deposit address and QR code you can use to receive funds. Send your Bitcoin to Cryptopia using one of those two things.

Cryptopia Received Bitcoin

Step 13. After sending your Bitcoin, click “Done.”

Buying Animecoin (ANI)

Step 14. You should now be back on the exchange page.

Step 15. On the left side, make sure the BTC tab is selected, search for “Animecoin”, and click the correct coin.

Cryptopia Animecoin Choice

Step 15. You can now buy Animecoin from the panel towards the middle of your screen.

Cryptopia Buy Animecoin

Step 16. If you’re new to buying cryptocurrency, click the top order from the Sell Orders panel. This will automatically fill your Buy Animecoin form with some data. Update the total BTC amount with what you’d like to spend, and the rest of the inputs will update accordingly. For your order to be filled immediately, this amount needs to be less than the amount that was automatically placed there when you clicked the order in the Sell Orders panel.

There you have it. You’re now the proud owner of Animecoin!

This article by Steven Buchko was originally published at CoinCentral.com

 

About the Author:

Steven Buchko is a managing editor at Coin Central and a blockchain investor. He’s also the co-founder of Coin Clear, a mobile app that automatically turns your daily spending habits into cryptocurrency investments.