Using a Web3 compatible wallet for cryptocurrencies makes it much easier to interact with this new technology. MetaMask is one of the famous wallets on the market today, at least for Ethereum-oriented users. It is a viable solution that makes it easier to interact with DApps and decentralized finance, among other things.
To onlookers, it always seems as if the cryptocurrency industry is very complex. Interacting with different assets and various ecosystems can be daunting. It is not the most consumer-friendly industry by any means, although things are improving gradually. To attract new people, there must be easier solutions for users to experiment with.
MetaMask is just one example of how things can be made more intuitive. It is a very simple wallet – as a browser plugin or a mobile app – that serves as a wallet and lets users interact with other parts of the Ethereum ecosystem. Although there is always room for improvement, no one can deny solutions like these will be beneficial.
Table of contents
- What You Need To Know
- What Does MetaMask Do?
- How To Install MetaMask?
- Installation And Backup
- Backing Up A Seed Phrase Correctly
- Accessing The Web 3.0
- How Does It Handle Privacy?
- Adding Tokens To MetaMask
- Other Notes
- Closing Thoughts
What You Need To Know
For those who have never interacted with MetaMask before, it may not be apparent why so many people use it. As Ethereum is the second-biggest blockchain ecosystem after Bitcoin, it attracts plenty of attention. However, it is very different because it focuses primarily on developers and building more complex products, services, and features. The downside of providing these alternative solutions is how they can prove somewhat challenging to interact with.
To put this into perspective, Ethereum is designed to become the distributed internet or Web 3.0. Rather than relying on centralized infrastructure managed by technology giants like Amazon or Google, Ethereum aims to decentralize everything. The use of blockchain technology, and by extension, smart contracts, can unlock tremendous opportunities for developers willing to go the extra mile.
Two industries to explore including decentralized finance – or DeFi – and decentralized applications – or DApps. Interfacing with both industry segments is rather complex under normal circumstances. However, with the help of a Web 3 wallet, such as MtaMask, this process becomes a lot more straightforward.
What Does MetaMask Do?
There are multiple layers to MetaMask as a software solution. First and foremost, it is a convenient Ethereum wallet that supports all token standards on this blockchain. Users can store their favorite Etheruem-based assets in this wallet, making it easier to keep everything in one place.
Secondly, MetaMask is built so it can interface with various websites and platforms. Rather than making users manually copy wallet addresses or scan QR codes, the Metamask extension for your browser can ping the wallet directly and create a window prompt to complete transactions. It is a very intuitive approach to handling cryptocurrency transactions, but there is a lot more to explore.
As MetaMask can interface with smart contracts directly, there are many opportunities for users regarding DeFi and DApps and what the future may hold.
How To Install MetaMask?
There are two ways to install MetaMask and make the most of its functionality. The first option is to use it as a browser plugin, which is compatible with all major browsers, including Google, Brave, and Firefox. The second option is to use the mobile application accessible on either iOS or Android. It provides the same functionality, although interacting with smart contracts or dApps may prove a bit challenging.
It is always best to download MetaMask from the official sources, either the website directly or by ensuring the correct developer creates the mobile application. There have been some incidents with fake Metamask applications showing up as mobile applications, stealing users’ money in the process. Once the application is installed, users can manually access it by entering their password.
It is essential to set up a strong password to keep your wallet safe. As this plugin/mobile application is used by many to store their entire Ethereum-based portfolio, it would be a shame to see a hacker take all the money. Strong password security is a must, especially in the cryptocurrency industry. For MetaMask, there is, unfortunately, no “extra’ protection such as two-factor authentication, making the use of a strong password all the more crucial.
Installation And Backup
The installation process for MetaMask is straightforward. As a browser user, download the plugin from the appropriate web store and install it like any other plugin. For mobile users, download and install the mobile application and proceed to the setup screen. All future steps will be similar from here on out, creating a unified cross-device experience for all cryptocurrency enthusiasts.
As a first step, users will need to import an existing seed phrase or create a new one. All new users will create a New Wallet, after which there will be some checkboxes and a request to create a password. Ensure this is a password no one can guess too easily, as it is the only protection layer for any funds stored within the mobile app or browser plugin. Mobile users have the advantage of adding fingerprint scanning to unlock their wallet if their device supports it, however.
The next crucial step is the backing up of the seed words. MetaMask is one of the many wallets that generate seed words instead of an exportable private key. These seed words are random in nature and will let users export their MetaMask wallet information. As this wallet is non-custodial, users are 100% responsible for storing funds or managing the associated data.
That doesn’t mean there is no private key or even multiple private keys, however. One should look at this wallet as a “vault” safeguarding balances and the associated keys. The seed words are the code to enter the vault, either from a different MetaMask installation or another wallet. Losing access to the seed words is catastrophic, as it equals losing access to funds and private keys alike.
Backing Up A Seed Phrase Correctly
For those who are new to cryptocurrencies, it is essential to back up a seed phrase properly. Doing so may be a bit more tricky than one thinks. A viable option is to write it down on paper – not in a text document on an internet-connected device – and keep it somewhere safe. That means not keeping it on your desk or in a location where anyone can stumble across it.
When it comes to storing that paper in a safe location, there are numerous options to explore. Some people keep it safe, which may not be convenient if you buy a new computer or mobile device. Even so, it is best to keep it somewhere other people would not even consider looking.
Another option is to write the seed phrase down multiple times and keep the paper backups in different locations. As this is information written on paper, there’s always a chance something will happen to it. Having multiple backups will prove essential in this regard, as there is a lot at stake where this seed phrase is concerned.
Skipping out on backing up the seed phrase is not an option with MetaMask, however. In the next step of the setup process, you will need to enter the seed phrase the wallet asked you to back up. Failure to provide the correct information will ensure you cannot complete the setup process. However, there is an option to go back and write it down correctly.
Accessing The Web 3.0
At its core, MetaMask is more than just a wallet for Ethereum and related tokens. It is also a gateway to the decentralized web, or Web 3.0. By making it easy to interface with blockchain-based services, tools, and products. MetaMask facilitates the adoption of these solutions. It takes away a lot of the technical aspects users otherwise would have to contend with.
A good example is how easy it is to access decentralized exchanges or DEXes. Rather than dealing with multiple software applications incapable of interacting, MetaMask lets users trade funds with ease. All one needs to do is connect the wallet to the platform of choice, and the user experience will improve drastically.
How Does It Handle Privacy?
When convenience and ease-of-use are involved, there is often a trade-off with privacy. For MetaMask users, that situation isn’t too different. However, it will heavily depend on which platforms you interact with and what permissions that platform requires. Every time a connection is made for the first time, you will see a dialog to confirm the action.
Even then, it is essential to understand which information you share voluntarily. Any platform you interact with will know your Etheruem address and its associated balance and tokens. Moreover, it can be linked to your IP address for reference. That is not necessarily problematic or something to avoid altogether, but rather something to be mindful of.
As long as you only share this information with websites you trust, there will be no real impact on privacy.
Adding Tokens To MetaMask
One of the benefits of this browser plugin/mobile application is how it depicts the Ether balance and any ERC-20 or other tokens tied to your address. However, not all of these token balances will be visible in MetaMask automatically. Many of them will need to be added manually. That process is relatively simple but may need to be repeated for all tokens under your account.
To add a token in the browser plugin, complete the following steps:
- Open your wallet by clicking on the extension.
- Click on the three dots in the top bar.
- Select View on Etherscan.
- Under Overview, click on the Token dropdown and search for the token you want to add.
- Under Profile Summary, you should see a contract address. Copy the address.
- Return to MetaMask and click on Add Token.
- Click on the Custom Token tab.
- Paste the address that you just copied into the Token Contract Address form.
- The rest should autofill. Click on Next, followed by Add Tokens.
- Return to the main “page” to see your full balance.
Repeating this process may prove necessary for every token you wish to add. The process may prove a bit trickier for brand new tokens, although EtherScan is usually very quick with updating the contract address for specific tokens and their tickers.
For those who are new to MetaMask, it is crucial to remember this solution is very versatile. It can interface with hardware wallets, such as the Trezor and Ledger units. Additionally, there is the contact list function to save addresses you interface with regularly. There are a few customization options in the settings to experiment with, depending on personal preference.
In the end, MetaMask is a viable wallet, but it will always remain a “hot wallet”. The security risks associated with hot wallets cannot be underestimated or ignored. It is ill-advised to keep all of your crypto funds in this wallet solution. Moving most funds to a cold storage solution is always advisable, as that will offer more peace of mind.
It is easy to see why MetaMask has become such a powerful and popular solution. Not only is it a convenient wallet for Ethereum-related funds, but it also connects to the Web 3.0. Although that infrastructure is still under development today, it is essential to have convenient access to new services and products from day one. Today, it is a direct gateway to decentralized exchanges, applications, and finance.
No one knows what the future will hold for Ethereum or MetaMask. There are still many opportunities to explore, yet not all of them will become appealing to mainstream users. Onboarding more people to crypto remains the number one objective. With its browser plugin and mobile app-based approach, MetaMask will be an essential catalyst in that process.
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Original source: https://vaultoro.com/what-is-metamask-and-why-does-it-matter/