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.

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 python3 and Bitcoin Core version 0.16 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).

• 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. Enter the directory and copy the file config.cfg_sample to config.cfg.

• Edit the file config.cfg 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) 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...
  

• Install Electrum Personal Server in your home directory with pip3 install --user .. On Linux the scripts (electrum-personal-server and electrum-personal-server-rescan) 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.cfg 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.cfg) to make them appear.

• 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.cfg (port 50002 by default).

A guide for installing Electrum Personal Server on a Raspberry Pi can be found here.

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.

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.

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.

Caveat about pruning

Electrum Personal Server is fully compatible with pruning, except for one thing. Merkle proofs are read from disk. If pruning is enabled and if that specific block has been deleted from disk, then no merkle proof can be sent to Electrum which will display the transaction as Not Verified in the wallet interface.

One day this may be improved on by writing new code for Bitcoin Core. See the discussion here.

Further ideas for work

• It would be cool to have a GUI front-end for this. So less technical users can set up a personal server helped by a GUI wizard for configuring that explains everything. With the rescan script built-in.

• An option to broadcast transactions over tor, so that transaction broadcasting doesn't leak the user's IP address.

• The above mentioned caveat about pruning could be improved by writing new code for Bitcoin Core.

Contributing

Donate to help make Electrum Personal Server even better: bc1q5d8l0w33h65e2l5x7ty6wgnvkvlqcz0wfaslpz or 12LMDTSTWxaUg6dGtuMCVLtr2EyEN6Jimg.

This is open source project which happily accepts coding contributions from anyone. Please keep lines under 80 characters in length and ideally don't add any external dependencies to keep this as easy to install as possible.

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.

Notes for developers

To seamlessly work on the codebase while using pip, you need to install in the develop/editable mode. You can do that with:

$ pip3 install --user -e /path/to/repo

/path/to/repo can also be a relative path, so if you are in the source directory, just use .. This installs the scripts in the usual places, but imports the package from the source directory. This way, any changes you make are immediately visible.

Testing

Electrum Personal Server also works on testnet and regtest. The Electrum wallet can be started in testnet mode with the command line flag --testnet or --regtest.

pytest is used for automated testing. On Debian-like systems install with pip3 install pytest pytest-cov

Run the tests with:

$ PYTHONPATH=.:$PYTHONPATH py.test-3

Create the coverage report with:

$ PYTHONPATH=.:$PYTHONPATH py.test-3 --cov-report=html --cov
$ open htmlcov/index.html

If you have installed Electrum Personal Server with pip, there is no need to set PYTHONPATH. You could also run the tests with:

$ python3 setup.py test

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