Select “Use Proxy” and make sure SOCKS5 is 127.0.0.1 and that the port is 9050:Ĭlose the network dialog. We don’t need a password for this wallet, leave the field blank and click Next: Since we only want a dummy wallet to access the settings, paste this key in the field and click Next: xpub661MyMwAqRbcF7NVwdGV5gKTj5cqEwDcJv21g1RqF51YmWj5ycNE4S8Vv3dFZRufGJvbfoFM2hapK6Sd7fdXtyF9QrpKBStMX5LAYJVNWoC Let Standard Wallet be selected, click Next:Ĭhange to “Use a master key” and click Next: We only use this wallet to access the settings so you don’t connect to random servers with your real IP-address (and give them all your addresses) once your cold storage multi-sig wallet is created. The wallet you create can be a “dummy” wallet that you delete after the process. If this is the first-time using Electrum, you’ll have to create a wallet (skip these steps and open a wallet if you already have one). To access the settings in Electrum, you need to open a wallet. You won’t notice anything if you launch Tor without the browser (nothing visible will start). You can launch the browser (it’s much easier to use then a few years ago) or only start Tor (like tor.exe on Windows). Gpg: There is no indication that the signature belongs to the owner. Gpg: WARNING: This key is not certified with a trusted signature! Gpg: Good signature from "Tor Browser Developers (signing key) " Gpg: assuming signed data in 'torbrowser-install-win64-8.0.6_en-US.exe' You can import the Tor signing key with the command: So, download the signature (.asc) for the file you download as well. You should now know how to verify digital signatures. If you don’t have Tor, go to and download the latest version of Tor Browser for your OS. Using Electrum with Tor should be a fairly straightforward process and we might as well do it from the start. This guide will use Tor as it’s free and generally seen as a better alternative. With a VPN, you’ll trust the provider (all traffic goes through them) which is probably safe in most situations (but you never know what information they store). You can also use a VPN, both solutions will hide your real IP-address from random servers. Tor uses “onion routing” to hide your real IP-address. At least, now you know what some of the risks are and can adjust that to your situation. You can of course keep using an old wallet, it’s still an huge improvement compared to keeping your bitcoin on an exchange or in a web wallet. This is why I recommend starting Electrum with a “dummy wallet” or an old wallet and setting up Tor before creating your cold storage wallet. You can generate new addresses in Electrum, but it’s almost always easier to create a new wallet (as you have to move your funds anyway). The hashes of at least your 20 first addresses will be known to some servers and they can easily monitor those for activity even after you’ve disconnected from their server. Unfortunately any old wallet you’ve used without Tor (or a VPN) should be treated as “compromised” regarding privacy. Tor isn’t a foolproof method for solving this, but it improves your privacy as it takes your IP-address out of the equation. ![]() It doesn’t matter what you have done between you had the bitcoin on the exchange, or even if it’s the same bitcoin. If you then connect to one of their servers and ask for the balance on a number of bitcoin addresses, it’s trivial for them to connect those addresses to you. If you bought your bitcoin on an exchange that use KYC (know your customer), you can assume that these companies have your name, address and IP-address. There’s several companies that specialises in chain analysis to deanonymize addresses and we can assume that they’re running several Electrum Servers. If you don’t use Tor or a VPN, one or more random servers will know all of your transactions, your wallet balance and your real IP-address. This is bad for privacy (and has been used for phishing attacks with a bug that’s now patched). Your addresses are hashed before they are sent to the server, but that only helps until an address is used for the first time.Įvery transaction you do is, by default, broadcasted through that server. Every address in your wallet is sent to the server so it can check for the current balance. Anyone can run a server and if you don’t specify a server, you’ll be connected to one randomly. Electrum works by connecting to special purpose servers.
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