If you want to experience every service that cryptocurrencies have to offer, you need more than just a wallet that stores and protects your information. You need something that offers you direct interaction with blockchains, as well as a secure crypto wallet.
MetaMask wallet offers you just that. MetaMask is a “bridge” which connects you to every service that the Ethereum network provides, such as access to decentralized applications (DApps), decentralized finance services (DeFi), and decentralized exchanges (Decentralise Exchange (DEX) is a crypto exchange platform that is built upon blockchain technology and negates the need ...).
Starting and using MetaMask might seem complicated at first, but once you get the hang of it, it’s actually a simple process. We’ll guide you through it step by step.
What is a Crypto Wallet?
For cryptocurrency blockchain transactions to be properly verified, they need to be signed with a private key and verified using a public key. Only when this occurs is the blockchain updated with a new block of information. These private keys are unique to an individual, and as their names suggest, they must remain private in the same way you keep your passwords private.
In order to protect your private keys from others, you need to store your private keys in crypto wallets.
Just as private keys are vital to transactions, crypto wallets are vital for ensuring the safety of your private keys, and thus, your cryptocurrency.
There are two types of crypto wallets:
Hot wallets are software programs, platforms or browser extensions on the internet that allow you to have access to your private key. You need to have access to the internet, a smart device such as a laptop computer or smartphone, and a web browser.
Cold wallets, on the other hand, are crypto wallets that are physical hardware, sort of like USB hardware. Cold wallets are much safer since they work offline, and only require access to a computer for confirming a transaction. However, cold wallets do not provide the services that hot wallets offer.
What Is MetaMask?
MetaMask was created in 2016 by a blockchain software company named ConsenSys.
MetaMask is one of the most popular hot crypto wallets on the market today. Moreover, MetaMask is an open-source (software that everyone can have access to) wallet. It runs and supports the Ethereum blockchain and all the ERC-20 tokens that run on its network.
MetaMask works as an application if you are using a phone, or as an extension if you are using a web browser. Chrome, Firefox and Brave are the browsers that MetaMask currently supports.
Not only does MetaMask store your cryptocurrencies, but it also serves as a medium for you to interact with DApps in decentralized finance (Decentralized Finance (DeFi) takes the decentralized concept of blockchain and applies it to the world of finance. Build...), such as PoolTogether.
How to Use MetaMask
Learning how to use MetaMask can take a bit of time because there are a lot of features that this crypto wallet offers. We’ll go through each step, one by one.
How to Install MetaMask on Your Browser
The first thing you need to do is to install MetaMask. Simply go to MetaMask’s official website and press “download now” to begin the download. Then, add the extension to your web browser.
Keep in mind that you need to be using a web browser such as Chrome, Mozilla Firefox or Brave, since it is these three browsers which support the extension of MetaMask.
Once the extension is added, MetaMask will welcome you to its program, and you are ready to begin using it.
How To Use MetaMask After Installing It
After installation, you need to press “get started” to officially begin.
Then, you will be asked if you already have a wallet, or if you want to create a new wallet. If you have an existing wallet, then you need to write down the seed phrase, which is a set of words that verifies that it is truly you accessing the account. If you do not have a wallet, then you need to create a new one.
If you import an existing wallet, you will need to create a new password that should contain a minimum of 8 characters. You’ll also need to agree to MetaMask’s terms and conditions.
If you create a new wallet, then you need to create a password. You will then receive the seed phrase of 12 words. The seed phrase should be written down somewhere safe (preferably on a piece of paper). If you forget the seed phrase, then you will not be able to recover the account.
Once the seed phrase is received and other private information is added, then you will have access to your virtual crypto wallet — MetaMask.
After the setup is finished, MetaMask will ask you if you’ll allow them to track your activity as a way of improving the software.
This answer is your choice. It will not affect any of the software’s functions.
Now that you have access to every function of MetaMask, you can click on the extension and access your assets. The assets bar shows your existing funds, and the activity bar shows your transaction history.
Here you also have the option to buy, send or swap cryptocurrencies.
The “Buy” option allows you to buy Ether (ETH) or import Ether from another wallet.
The “send” option allows you to send Ether to another account. In order to do so, you need to enter the correct address of the account to which you want to send your Ether. However, you need to have sufficient Ether to cover the gas fees of this service. You have the option to send them at a slow rate (smaller gas fee), average rate (normal gas fee), or fast rate (larger gas fee).
Gas fees change every time. If you want to know the optimal gas price that is currently in the network, you can check sites like ETH Gas Station.
The “swap” button allows you to swap your Ether for other tokens that are supported in the Ethereum network.
How to Connect to Different DApps
A big advantage that comes with MetaMask is the ability to connect to many DApps.
In order to do so, you need to head over to the website of the desired DApp. After going to the website,find a button such as “connect wallet” that allows you to connect MetaMask to that DApp.
Then, all you need to do is simply confirm the connection in a pop-up window that will appear. This is merely a connection of your wallet address with the application. Whenever you want a service completed on the DApp, funds may be required. However, they do not take funds directly, but rather ask you first if you are willing to pay the required amount.
These are the simple steps that you need to take for downloading MetaMask —using it to buy, sell or swap tokens, as well as connecting it with DApps.
MetaMask Pros and Cons Using
Using MetaMask either as an extension or application has its benefits, as well as some drawbacks that complement them.
Here are some pros and cons of MetaMask.
MetaMask has gained a lot of attention in recent years. Not only has this made the software safer and better, but it has incentivized other DApps to support MetaMask. Furthermore, MetaMask has built up a loyal fanbase among customers, which has motivated the MetaMask team to develop their software even further.
A big advantage of MetaMask is its easy access. Everyone can create a new wallet or import their existing wallets through MetaMask. All you need is a trusted web browser, access to a computer, and a safe internet environment. Then, simplyownload MetaMask and create your wallet through some simple clicks.
Another huge advantage that MetaMask has as a crypto wallet is the fact that it is open-source software. Users of MetaMask can actively engage and access updates and information regarding the software, ensuring a better and safer environment for everyone. Note that not all crypto wallets are open-source.
Less Security Than Cold Wallets
When it comes to security, cold wallets are more secure than hot wallets. Since everything that’s online is vulnerable to harmful viruses, hackers or any sort of malware, using MetaMask is not as secure as using hardware wallets such as Ledger or Trezor. Additionally, when writing down your seed phrase after creating an account, you have to make sure not to write the words on your computer, but rather on a piece of paper that you then put somewhere safe. If a hacker or virus were ever to get past your firewall, then everything on your computer could be misused, even the seed phrase. Losing the seed phrase would mean that you can no longer access your account, no matter how much you’ve invested in it.
While MetaMask won’t collect your data, the web browser you use might do so. As such, you need to be aware that your activity might be collected in big data. Additionally, you should make sure that every extension you use is legit, because there may be an unwanted extension that can steal your private information. The only thing that MetaMask can track is the interactivity within your wallet for the purpose of improving their software. You can decide whether or not you want this to happen in the extension settings, as well as when you initially create a new wallet.
MetaMask works through external nodes, so if anything untoward happens to those external nodes, it may happen with the MetaMask system software as well.
Another setback of MetaMask is that it only supports the Ethereum network. Even though it provides every service that the Ethereum network has to offer, many crypto enthusiasts hope that in the future, MetaMask will support other networks besides just Ethereum’s.
While these disadvantages may seem unfavorable, some of them are expected to be removed as MetaMask keeps upgrading their software.
How Does MetaMask Profit?
So what does a program as big as this one get for all these services it offers?
Since MetaMask is free to download and use, there has to be another way for MetaMask to operate on such a large level.
Whenever tokens are swapped in MetaMask, an additional fee of 0.875% needs to be paid. That additional fee belongs to MetaMask. Although it might seem like a small amount, a vast amount of token swapping occurs every day. Given the fact that there are people who trade with thousands of dollars, 0.875% might actually prove to be lucrative for the people who run MetaMask.
According to Decrypt, MetaMask earns around $100,000 per day. In January of 2021, MetaMask generated a record-breaking daily revenue of around $220,000, with the volume of the total daily swaps reaching around $50 million.
Hence, while MetaMask as an application or a web browser extension is free to download and use, it still generates a tremendous amount of money due to the token swapping fees.
Keep in mind that a lot of costs are needed to run a big crypto wallet that not only stores and protects your funds, but also allows you to connect to different DApps on the Ethereum network.
The Bottom Line
MetaMask is one of the most important crypto wallets. Its easy access and the connection it makes with DApps and traders are a few of the reasons why this software has become so important in the world of cryptocurrency. In fact, crypto wallets like MetaMask are one of the reasons why cryptocurrencies are not just cryptocurrencies anymore: they provide many more services that will surely only become more popular in the future.
We’ll have to wait and see whether or not MetaMask will be available to other blockchains and cryptocurrencies in the future. However, as an open-source crypto wallet, with more and more people opening a MetaMask account each week, its future looks bright.