This code is now unmaintained. The replacement code for electrum server is ElectrumX: https://github.com/spesmilo/electrumx
The server indexes UTXOs by address, in a Patricia tree structure described by Alan Reiner (see the 'ultimate blockchain compression' thread in the Bitcointalk forum)
The server requires bitcoind, leveldb and plyvel
The server code is open source. Anyone can run a server, removing single points of failure concerns.
The server knows which set of Bitcoin addresses belong to the same wallet, which might raise concerns about anonymity. However, it should be possible to write clients capable of using several servers.
To install and run a server, see INSTALL. For greater detail on the installation process, see HOWTO.md.
To start and stop the server, use the 'electrum-server' script
Electrum-server is made available under the terms of the MIT License.
See the included LICENSE for more details.