A personal cryptocurrency node is the best and most efficient way to achieve financial independence. It gives complete control, eliminates the need for intermediaries, and increases your funds’ security.

While using a third-party node, you have to trust that the transaction channel is reliable enough. When you set up your own node, you have complete management rights above your wallet transactions.

An Electrum server provides the necessary efficiency and security to integrate it with Bitcoin and Litecoin wallets. The server was designed to support cryptocurency wallets with a secure connection to the full Bitcoin or Litecoin nodes. Electrum server is also resource-efficient, among other things.

Without further ado, let’s see how having your own Electrum server might benefit you.

Exploring the Benefits of Hosting Your Electrum Server for Bitcoin or Litecoin

The security of blockchain technology relies on full nodes.

A full copy of the Bitcoin blockchain currently occupies a lot of space. Because of this, synchronizing a full node can not only be time-consuming but also very resource-demanding.

The Electrum Personal Server (EPS) addresses this problem, giving cryptocurrency wallet users an option not to download the entire blockchain but get access to it, all the while providing increased efficiency, security and privacy.

Electrum server only requires a little backend server configuration so it’s easy for people without profound technical knowledge to use it synchronized with Bitecoin and Litecoin wallets.

Each EPS user runs its own node instead of processing transactions on a centralized basis (through other servers), which embodies the true nature of decentralization.

When it comes to the Electrum wallet, which is easily accessed through the privacy of an Electrum server, there are many advantages for Litecoin and Bitcoin enthusiasts.

Pros of Electrum wallet for Bitcoin and Litecoin enthusiasts

  • Easy-to-install and beginner-friendly. An Electrum wallet is easy to set up on a desktop or smartphone with a built-in guide to navigate users through any challenges. The user-friendly layout of the Electrum wallet makes sending and receiving (and other associated features) Bitcoin and Litecoin transactions easy.
  • Enhanced privacy and security. Electrum wallet is heavily encrypted. The wallet keeps the user’s balances and keys private (with the option of integrating them with other Bitcoin/Litecoin clients). It even provides a secret recovery phrase if anything happens to the device. Undoubtedly, accessing an Electrum wallet through an Electrum server takes the privacy and security to the next level.
  • Powerful servers. An Electrum wallet is powered by robust servers that use the principles of decentralization, meaning the uptime is practically constant when using the wallet. Overall, due to its servers’ capacity, an Electrum wallet is “immune” to any failures, which is why it’s so fast.
  • Hardware support. Electrum supports hardware wallet integration with major hardware wallets, including Ledger-Nano S, Keepkey, and TREZOR.
  • Open-source. An Electrum wallet is free to use, and its code is accessible to the public. The open-source nature of the wallet makes it easier to spot vulnerabilities and improve the platform.


Enhancing Privacy

When you use EPS, that means that you have full control over the scope of the blockchain network and, thus, much-needed privacy. Since the Electrum server is directly connected to the full node, server users are “immune” to any security threats.

Your IP and personal data are highly protected since nobody else runs your Electrum server. Additionally, you are protected from any malicious attacks or scams, like fake transactions. Thus, your financial assets are secure.

To compare, Bitcoin Core doesn’t encrypt files related to the user’s cryptocurrency balance, thus risking a user’s private data. With EPS, your transactions, balances, and addresses are limited to the Electrum server only and aren’t accessible to a third-party server, which offers you increased financial privacy.

With all of this in mind, it’s essential to know that the Electrum private server does not offer you 100% privacy. It prevents other servers from accessing your data, but not other users, who have access to the network you are using, in this case, blockchain.

The thing is, you cannot maintain total anonymity and privacy while issuing blockchain transactions. Users who look at the blockchain data can see transactions associated with your address.

Ensuring Reliability

Even though the nature of blockchain is inherently public, accessing the blockchain through an Electrum server gives you maximum authority over your wallet data.

To compare with third-party servers, the uptime can sometimes be inconsistent for various reasons, such as server capacity, high traffic, performance, and technical issues. Thus, when the third-party server is down, you cannot access your wallet when needed.

With Electrum, the server is always available to you under stable internet and power connection conditions. However, to maintain potentially uninterrupted uptime, you need to know how to manage your server, and this could become a challenge not only for beginners but also for tech-savvy users. Running the server from home is less reliable than specialized data centers because users can be subjected to unscheduled power outages or issues with internet connection. That’s why some people decide to run servers through a VPS, which would ensure that the resources available at data centers make it stay online.

If it’s essential for you to to be able to access the wallet anytime, it would be wise to ensure the maximal and uninterrupted resource supply that data centers can provide.

Monitoring Network Health

Both Bitcoin and Litecoin blockchains follow the path of decentralization. They use multiple nodes to keep records and issue transactions rather than relying on one node. The amount of nodes directly correlates with the performance capacity and flexibility of the network.

Using an Electrum personal server means using a copy of the blockchain network. This way, you also follow the decentralization principle. The copy of the blockchain network you have on your server allows other users to access the data (mainly the information about transactions) that copy holds.

Ultimately, the more users have their own blockchain copy or, in other words, the more widespread the network gets, the more failure-resistant it becomes. In this case, it doesn’t have to rely on individual network parameters.

Since your server is responsible for the load of transactions you issue through it, other servers carry less “data weight”, contributing to the health of the whole network. If everyone had their own server, shared servers would get less load, and the general blockchain network could show better performance metrics.

Think of it this way: if everyone took their share of responsibility, completing the ultimate task would be much easier, quicker, and safer. Each individual server doesn’t take away from the performance of the general network; on the contrary, it facilitates spreading a healthy load within it.


Step-by-Step Tutorial for Establishing Your Private Electrum Server for Bitcoin and Litecoin

We’ve composed a comprehensive step-by-step tutorial on setting up an Electrum server for Bitcoin or Litecoin.


Step 1: Download a Linux operating system distro. Linux distributions are the best operating system match for setting up an Electrum server. We recommend the newer versions of the Ubuntu operating system as it’s both user-friendly and robust.


Step 2: Choose a dedicated server provider. It would help if you chose a dedicated server provider that supports Litecoin or Bitcoin nodes. You need to make sure that the server complies with the requirements of running a Litecoin or Bitcoin node, for example, the minimum of 150 GB of free space.


Step 3: Install a Bitcoin or Litecoin core. From the official Bitcoin website or Litecoin website, you’ll need to download Bitcoin Core or Litecoin core, respectively.


Step 4: Enable RPC calls and turn on transaction indexing. This step involves synchronizing your Bitcoin Core or Litecoin Core with your Electrum server. For enabling RPS calls, set “server=1” in the configuration file; for turning on the transaction indexing, set “txindex=1”.


Step 5: Install Git and Python. Electrum servers run on Python; therefore, you need to install its newer version. You also will need to install Git to clone the server’s repository from GitHub.


Step 6: Clone and Install an Electrum server. Once you have cloned the server’s repository from GitHub, install an Electrum server from there.


Step 7: Configure the server. In the Electrum server environment, you must set “COIN=BitcoinSegwit” if you’re working with Bitcoin and “COIN=LitecoinSegwit” if you’re working with Litecoin.


Step 8: Run the server. An Electrum server will require some time to activate, as it takes some time to sync with the blockchain network.


Step 9: Install the wallet software. Install Electrum for Bitcoin and Electrum-LTC for Litecoin on your PC from their official websites.


Step 10: Connect your wallet to your server. In your wallet software, go to “Tools” \ “Network” \ “Server tab”, and there, put the IP address of your Electrum server.


When you complete these ten steps, you need to restart your wallet software for changes to occur. Once it reboots, your wallet will be integrated with your Electrum server and the blockchain data.

Seamless Node Operation

Full cryptocurrency nodes (like Bitcoin or Litecoin nodes) are software that stores a complete copy of the blockchain. The first synchronization of a full node can take up to several days and subsequently uses a substantial portion of computer resources to synchronize all transactions on the network.

The Electrum Personal Server provides Bitcoin or Litecoin wallet users with increased efficiency, security, and privacy. In this implementation of the Electrum protocol, users who wish to join a full node can simultaneously use all traditional Electrum wallet features (hardware wallet integration, offline login, and secret phrase recovery).

With the Electrum server, you – the user – contribute to the decentralization philosophy promoting financial independence. Along with it, you get many benefits, such as unmatched privacy, next-level security, transaction independence, and flexibility, with you being able to access your own server any time you want.

To Sum Up

Setting up an Electrum server might seem complicated, but if you follow the steps, you can easily enjoy the benefits of owning an Electrum server.

And just like that, instead of being an average cryptocurrency user, you become a part of something bigger, a breakthrough in the digital world that celebrates an individual’s financial independence.