Electrum Personal Server

Electrum Personal Server aims to make using Electrum bitcoin wallet more secure and more private. It makes it easy to connect your Electrum wallet to your own full node.

It is an implementation of the Electrum server protocol which fulfills the specific need of using the Electrum wallet backed by a full node, but without the heavyweight server backend, for a single user. It allows the user to benefit from all of Bitcoin Core's resource-saving features like pruning, blocksonly and disabled txindex. All of Electrum's feature-richness like hardware wallet integration, multisignature wallets, offline signing, seed recovery phrases, coin control and so on can still be used, but connected only to the user's own full node.

Full node wallets are important in bitcoin because they are an big part of what makes the system be trustless. No longer do people have to trust a financial institution like a bank or paypal, they can run software on their own computers. If bitcoin is digital gold, then a full node wallet is your own personal goldsmith who checks for you that received payments are genuine.

Full node wallets are also important for privacy. Using Electrum under default configuration requires it to send (hashes of) all your bitcoin addresses to some server. That server can then easily spy on your transactions. Full node wallets like Electrum Personal Server would download the entire blockchain and scan it for the user's own addresses, and therefore don't reveal to anyone else which bitcoin addresses they are interested in. Electrum Personal Server can also broadcast transactions through Tor which improves privacy by resisting traffic analysis for broadcasted transactions which can link the IP address of the user to the transaction. If enabled this would happen transparently whenever the user simply clicks "Send" on a transaction in Electrum wallet.

For a longer explaination of this project, see the mailing list email and bitcointalk thread. See also the Bitcoin Wiki pages on full nodes.

How To

• If you dont already have them, download and install Bitcoin Core version 0.17 or higher. Make sure you verify the digital signatures of any binaries before running them, or compile from source. The Bitcoin node must have wallet enabled, and must have the RPC server switched on (server=1 in bitcoin.conf). On first run, it is recommended to create a wallet dedicated to Electrum Personal Server using the command line argument bitcoin-cli createwallet electrumpersonalserver true.

• If you dont already have it, download and install Electrum bitcoin wallet, and set up your Electrum wallet (for example by linking your hardware wallet). To avoid damaging privacy by connecting to public Electrum servers, disconnect from the internet first or run Electrum with the command line argument --server localhost:50002:s.

• Download the latest release of Electrum Personal Server. If using Windows OS take the packaged binary release build electrumpersonalserver-windows-release-XXX.zip.

• Extract and enter the directory, and copy the file config.ini_sample to config.ini. Edit the file config.ini to configure everything about the server. Add your wallet master public keys or watch-only addresses to the [master-public-keys] and [watch-only-addresses] sections. Master public keys for an Electrum wallet (which start with xpub/ypub/zpub/etc) can be found in the Electrum client menu Wallet -> Information. You can add multiple master public keys or watch-only addresses by adding separate lines for the different keys/addresses:

  wallet1 = xpub661MyMwAqRbcF...
  wallet2 = xpub7712KLsfsg46G...
  

• If you created a wallet dedicated to Electrum Personal Server in Bitcoin Core, you have to modify the line wallet_filename in the [bitcoin-rpc] section with the name of the wallet, for example electrumpersonalserver.

• If using the windows packaged binary release, drag the file config.ini onto the file electrum-personal-server.exe to run the server, or on the command line run electrum-personal-server config.ini.

• If installing from the source release, install Electrum Personal Server in your home directory with pip3 install --user .. On Linux the script electrum-personal-server will be installed in ~/.local/bin. Please note, if for some reason, you want to make a system-wide install, simply run pip3 install . as root (e.g. if you have sudo setup, you could use: sudo pip3 install .). Run electrum-personal-server /path/to/config.ini to start Electrum Personal Server.

• The first time the server is run it will import all configured addresses as watch-only into the Bitcoin node, and then exit. If the wallets contain historical transactions you can use the rescan script (electrum-personal-server --rescan /path/to/config.ini) to make them appear. If using the windows packaged binary release build then drag the file config.ini onto the file electrum-personal-server-rescan.bat.

• Run the server again which will start Electrum Personal Server. Wait until the message Listening for Electrum Wallet ... appears and then tell Electrum to connect to the server in Tools -> Server. By default the server details are localhost if running on the same machine. Make sure the port number matches what is written in config.ini (port 50002 by default).

Linked here are guides for installing Electrum Personal Server on a Raspberry Pi, Windows and Mac OS.

Pro Tip: run Electrum wallet with the command line arguments --oneserver --server localhost:50002:s. This stops Electrum connecting to several other servers to obtain block headers; and locks Electrum to connect only to your server, disabling the GUI button to stop accidental connections. This helps avoid a user accidentally ruining their privacy by connecting to public Electrum servers. Another way to do this is to open Electrum's config file and edit the lines to oneserver=true.

Pro Tip2: run tor on the same machine as Electrum Personal Server. Then by default transactions will be broadcast through tor. If running tor, also set walletbroadcast=0 in your bitcoin.conf. This prevents the wallet from rebroadcasting transactions without tor.

Quick start on a Debian/Ubuntu machine with a running Bitcoin full node

1. Download the latest release of Electrum Personal Server. (Not the Windows version, the "Source code" zip or tar.gz.)
2. Extract the compressed file
3. Enter the directory
4. cp config.ini_sample config.ini
5. Edit the config.ini file:
   1. Add bitcoind back-end RPC auth information
   2. Add wallet master public keys for your wallets
6. Install the server to your home directory with pip3 install --user .
7. Make sure ~/.local/bin is in your $PATH (echo $PATH). If not, add it: echo 'PATH=$HOME/.local/bin:$PATH' >> ~/.profile, logout, and log in again
8. Run the server: electrum-personal-server config.ini
9. Start your Electrum wallet: electrum --oneserver --server localhost:50002:s.

Exposure to the Internet

Right now, Electrum Personal Server is easiest to use when it, your full node and your Electrum wallet are all on the same computer.

Other people should not be connecting to your server. They won't be able to synchronize their wallet, and they could potentially learn all your wallet transactions. By default the server will accept connections only from localhost, though this can be changed in the configuration file.

The whitelisting feature can be used accept only certain IP addresses ranges connecting to the server. The Electrum protocol uses SSL for encryption. If your wallet connects over the public internet you should generate your own SSL certificate instead of using the default one, otherwise your connection can be decrypted. See the configuration file for instruction on how to do this.

Another option is to use a SSH tunnel to reach Electrum Personal Server. SSH connections are encrypted and authenticated. This can be done on the command line with: ssh username@host -L 50002:localhost:50002 or with Putty for Windows. Then connect Electrum to localhost, and SSH will forward that connection to the server.

Number of connections

Right now Electrum Personal Server can only accept one connection at a time.

Lightning Network

Right now Electrum Personal Server does not support Lightning Network which Electrum wallet 4.0 and above implements.

How is this different from other Electrum servers ?

They are different approaches with different tradeoffs. Electrum Personal Server is compatible with pruning, blocksonly and txindex=0, uses less CPU and RAM, is suitable for being used intermittently rather than needing to be always-on, and doesn't require an index of every bitcoin address ever used. The tradeoff is when recovering an old wallet, you must to import your wallet first and you may need to rescan, so it loses the "instant on" feature of Electrum wallet. Other Electrum server implementations will be able to sync your wallet immediately even if you have historical transactions, and they can serve multiple Electrum connections at once.

Traditional Electrum servers inherently are not very scalable and use many resources which push people towards using centralized solutions. This is what we'd like to avoid with Electrum Personal Server.

Definitely check out implementations like ElectrumX if you're interested in this sort of thing.

Bitcoin without internet access

Electrum Personal Server can also be used as a building block for systems which use bitcoin over mesh networks and satellites instead of connecting the internet. See here and here for information and setup guide.

Further ideas for work

• Allowing connections from more than one Electrum instance at a time. See issue #50. First the server code should be seperated from the networking code.

• Fix mempool lock/CPU bottleneck issue. See issue #96.

• Research and develop an easier way of rescanning the wallet when blockchain pruning is enabled. See issue #85.

• Developing some way for Electrum servers to authenticate clients, so that Electrum Personal Server can accept connections from the entire internet but without a fear of privacy loss.

• Dynamic adding of wallet master public keys. Perhaps by polling for changes in the config file.

Contact

I can be contacted on freenode IRC on the #bitcoin and #electrum channels, by email or on twitter.

My PGP key fingerprint is: 0A8B 038F 5E10 CC27 89BF CFFF EF73 4EA6 77F3 1129.

Media Coverage and Talks

• https://bitcoinmagazine.com/articles/electrum-personal-server-will-give-users-full-node-security-they-need/

• Discussion at Building on Bitcoin 2018 transcript

• Electrum Personal Server talk at London Bitcoin Developer Meetup

Contributing

Donate to help make Electrum Personal Server even better: bc1q5d8l0w33h65e2l5x7ty6wgnvkvlqcz0wfaslpz or 12LMDTSTWxaUg6dGtuMCVLtr2EyEN6Jimg. Signed donation addresses can be found here.

This is open source project which happily accepts coding contributions from anyone. See developer-notes.md.