Created in 2011 by Thomas Voegtlin and constantly improved since, Electrum is the absolute benchmark by which Bitcoin desktop wallets get evaluated. It’s also no surprise that whenever Bitcoin fork projects were created, Electrum was among the first wallet choices to become available: it’s packed with all the power user features you need and it can also be used in a basic way by those who want to keep it simple.
Wasabi Wallet is also inspired by Electrum and borrows some of its philosophical and design choices. But instead of trying to become a Jack of all trades which offers features for all Bitcoin use cases, Wasabi Wallet is optimized for privacy.
From the get-go, Wasabi offers a trustless on-boarding experience which gets you connected to the Tor network for anonymity and downloads block filters so you don’t have to trust somebody else’s node (and if you’re running your own node in the background, Wasabi will connect to it).
In comparison, Electrum offers Tor routing as an optional feature that must be activated manually from the settings menu. Also, the Bitcoin blockchain information gets accessed from a handful of random Electrum servers – an experience which is far from ideal, as a stranger will get your transaction data and everything else contained within your xpub.
If you don’t want the rest of the Bitcoin network to know your real IP address (which is tied to your local internet provider) and see which addresses you’re generating from your extended public key, then you should use Wasabi. The best part about it? Everything happens in the background automatically, so you don’t have to think about setting up .onion addresses and linking your own full node.
With a proper setup, you can use Electrum Wallet with the same degree of network-level and public key privacy as Wasabi Wallet. But a solution which makes privacy the default setting is more optimal for newbies, as well as advanced users who don’t want to get bothered with manual fiddling.
But now let’s get to Wasabi’s truly exclusive and unique feature among desktop wallets: the Chaumian CoinJoins. They make bitcoins more fungible by mixing equal amounts to the degree where it’s nearly impossible to figure out where the funds come from. It’s like taking paper money and making dozens of people leave their fingerprints on the notes, to make sure that one can’t discriminate between good money and bad money. It’s all money and it’s legal and tainted in equal measures.
In Wasabi Wallet, CoinJoins have a dedicated menu tab and you get to choose the size of your anonymity set: the more participants join in to mix their coins with you, the harder it becomes for blockchain analysts to figure out where the money comes from and to whom it goes. This is especially useful if you don’t want every observer of the public ledger to know how much money you’re making and where you spend it. CoinJoins will mix your UTXOs and create equal outputs that can belong to any of the mixing participants. So a CoinJoin transaction with an anonymity set of 50 will cause headaches to those who conduct chain analysis operations.
In order for bitcoin to become sound money, it needs to also gain more fungibility – and Wasabi is the only BTC wallet that’s available across all major desktop operating systems (Windows, MacOS, Linux) and offers easy access to CoinJoins (the other option is JoinMarket, which is more oriented towards power users).
Something that Wasabi and Electrum have in common is hardware wallet support. Yet Wasabi relies on Andrew Chow’s HWI library and only offers a custom experience to Ledger Nano S and Coldcard wallet. Learn more about this approach from Max Hillebrand’s recent interview on Bitcoin Takeover. On the other hand, Electrum has been supporting hardware wallets for a longer time and can even unlock advanced features such as Super Shamir Backups for Trezor Model T or multisig setups.
PSBT (Partially Signed Bitcoin Transactions, as described in BIP 174) support is yet another feature that you can find in both Wasabi and Electrum. This means that you can use a hardware wallet like Coldcard or SeedSigner without actually connecting the device via USB (partially-signed transaction data gets connected via SD card, and the second part of the operation gets handled in the desktop wallet interface).
But when we walk into the realm of multiple signatures, we notice more differences. Wasabi is a single-sig desktop wallet which is optimized for privacy. On the other hand, Electrum offers all the features that you need and puts you in a position of configuring the software to suit your needs. So if you want to do a 2 of 3 multisig with a 5 of 7 part Shamir backup on top, Electrum will help you reach this degree of sophistication. But if you don’t want somebody walking behind you to see how many bitcoins you own (Lurking Wife Mode), you don’t want your employer to know how you’re spending your bitcoins (CoinJoins), then Wasabi is your better option.
Last but not least, Electrum allows you to manage your Lightning Network channels and even run a watchtower to verify if the participants are being honest with the states that they’re broadcasting and punish bad actors. Wasabi is only optimized for the base layer of Bitcoin and cannot facilitate any of your Lightning transactions.
While Electrum is general-purpose and highly customizable to suit every user’s needs, Wasabi is tailored for privacy on the main Bitcoin chain. This is part of the reason why the choice between Wasabi and Electrum isn’t exclusionary – both of them are excellent pieces of free open source software that you should be using to suit your needs. When you need network-level privacy from the get-go and a tool to make your bitcoins more fungible, then you should use Wasabi. But when you want to deal with multisig setups and Lightning, then it’s Electrum that will suit your needs. In your path to financial sovereignty, you should use all the features in your best interest.
Article written by Vlad Costea, Twitter @TheVladCostea @BTCTKVR