What is MetaMask?
MetaMask is a free crypto wallet software that people can use to interact in the crypto world. It lets you buy, sell, and trade crypto assets for the Ethereum blockchain, much like how a real wallet lets you purchase items in the real world.
It’s been around since 2016. ConsenSys, the largest Ethereum development company in the world, launched it as a tool to simplify access to decentralized applications (DApps). It is possible on MetaMask to:
Buy, receive, send and swap Ether (ETH), the main token on Ethereum
Buy, receive, send and swap nonfungible tokens (NFTs) in marketplaces
Connect to Ethereum dapps
Connect to other crypto wallets
Play blockchain-based games
Access different networks such as the BNB Smart Chain and other testnets
MetaMask is free to use and can be installed as an extension on internet browsers, Google Chrome, Firefox, Brave, and Edge, or downloaded as a smartphone application both on iOS and Android. With over 30 million users, MetaMask is one of the most popular cryptocurrency wallets today.
In this article, we’ll go over some of the basics of using MetaMask, including how to create a wallet, make transfers and ways to secure it.
How does the MetaMask crypto wallet work?
Ethereum is a decentralized blockchain network built to store data and run a computer program called smart contracts. Users who run these smart contracts on their computers or machines earn rewards in Ether.
A computer that joins the Ethereum network, processes transactions and shares data with other users is called an Ethereum node. Ethereum-powered DApps like those for cryptocurrency exchanges, games like Axie Infinity, sharing digital art and more also run through smart contracts.
Many people have difficulty dealing with the many steps involved with DApps and tokens on the blockchain, but MetaMask makes it easy. It lets users interact with DApps by running smart contracts on a node called Infura rather than on their own computers. MetaMask has all the necessary tools to handle DApp interactions. In essence, MetaMask has three primary uses:
MetaMask functions as an Ethereum wallet that allows storage for ETH, ERC-20 and ERC-721 tokens in one place. You can also create multiple wallet addresses and use them as you need.
It gives users more control over their data by only generating a public and private key on their browser. The former is like an email address that you can share publicly to receive funds, while the latter is like a password that must be kept from anyone.
With the help of its trade function, MetaMask users can perform peer-to-peer (P2P) token swaps with ease. It lets users bypass the need for a third-party custodian or intermediary platform. It also gathers data from various decentralized exchange (DEX) aggregators, individual DEXs and professional market makers.
By doing so, MetaMask users are guaranteed to receive the lowest possible pricing while simultaneously reducing the number of steps required.
Users can easily and directly access various blockchain-based industries and services, including the decentralized finance (DeFi) ecosystem. The wallet helps streamline access to DApps, crypto finance services, games, NFTs and other DApps powered by Ethereum. It allows users to spend, send and stake their cryptocurrency across the Ethereum ecosystem without requiring new wallet integrations or too many steps.
What do you need to set up MetaMask?
To begin, its necessary to download the official MetaMask extension on one of the supported browsers. Once installed, the Welcome to MetaMask message will show, and then the wallet configuration can begin. You can choose to import your wallet or create a new one. Creating a wallet is for users who wish to set up a new MetaMask wallet. Import wallet is for users with an existing MetaMask wallet on another device and wish to import it to a new one.
If you’re creating a new wallet, you’ll be prompted to create a password and provide a 12-word seed phrase for backing up your account. Write it on a piece of paper and store it securely. If you use a different browser or machine, you’ll need it to access your wallet again. If you’re importing a wallet, you’ll need to input your existing seed phrase.
What coins can you hold on MetaMask?
MetaMask can hold Ether and coins created on networks compatible with the Ethereum blockchain (such as ERC-721, ERC-20 and others) as well as BNB Smart Chain tokens such as Pancake Swap (CAKE), Seesaw (SSW), Battle Infinity (IBAT), and Baby Doge (BabyDoge).
A few popular ERC-20 tokens include Chainlink (LINK), Tether (USDT), Shiba Inu (SHIB), Wrapped Bitcoin (wBTC) and OmiseGO (OMG). MetaMask does not support Bitcoin (BTC), as it is based on a different blockchain.
How do I transfer crypto to the MetaMask wallet?
First, open MetaMask and select the account you want by clicking on the dropdown arrow next to the account icon at the top right of the window. Once selected, click “Copy Address” on the right side of the screen. Your MetaMask wallet address is 42 characters long and starts with “0x.” You’ll find it under your account name (in the format 0x12r45…6HJ9).
Say you wish to transfer ETH and tokens from another wallet like Coinbase to your MetaMask account. All you have to do is sign in to Coinbase and click the Send/Receive button. Check and input all necessary details like the amount of ETH you’re sending and that you’ll “Pay with” Ethereum.
Then paste your MetaMask public address in the “To” address box. You can add a note if you think it’s required. Finally, press Continue to review your transfer, and hit “Send Now” if everything looks good. You can also share your address with someone sending tokens to you.
How to use MetaMask to make transactions
There are 3 primary operations you can do on your MetaMask wallet:
You can use fiat to buy ETH directly on MetaMask. Just head to your wallet homepage and click Buy. Payment methods are Wyre or Transak, which supports Apple Pay and credit or debit cards.
At the bottom of the screen, you’ll notice a slippage fee, which is the gap between the expected and executed price of a trade. It frequently happens during periods of high volatility.
You should see your balance update a few minutes after the transaction is mined or processed on the Ethereum blockchain. ETH provides you with gas to do Ethereum transactions (such as exchange for other Ethereum-based tokens or purchase NFTs).
To send ETH to someone else:
You can expedite your transaction by adjusting the estimated gas fee. Network issues can delay or fail transactions with lower gas fees. But, if you’re new to MetaMask, you can ignore it. Click Confirm. Once verified, you should view this transaction in your history.
Click Swap to exchange one cryptocurrency token for another. Choose the token you want to swap in the “Swap from” field. Enter the amount. Select the token you want to exchange it for in the “Swap to” field.
After that, in the Slippage Tolerance section, choose or input your own slippage percentage. The swap order will be canceled if your maximum slippage percentage limit is exceeded. Then click Review Swap. MetaMask will gather rates from DEX aggregators and DEXs and show you the best quote and gas fee. If you’re okay with the quote, click Swap and wait for the transaction to complete.
How to store your Ether in a MetaMask wallet
MetaMask is a software wallet connected to the internet. It serves as a bridge to DApps built on the Ethereum blockchain. However, anything connected to the internet is not 100% secure from hackers through malware or fake links.
A combination of a hard wallet like Ledger and a software wallet like MetaMask is considered the safest way to store your ETH. A hardware wallet is a physical wallet that provides additional protection through a physical U2F. For example, the Ledger, which resembles a USB stick, must be physically plugged into a computer to confirm every transaction requested by MetaMask.
Now, if you want to withdraw or cash out ETH through MetaMask, you will need to use an exchange platform like Binance to sell your ETH or other tokens for fiat currency since MetaMask doesn’t offer this functionality. You’ll have to manually transfer the tokens to the exchange platform.
One of the biggest benefits of using MetaMask is that it’s easy to set up and use. In fact, you can have a wallet within minutes of downloading the extension. Here are some other major benefits that make MetaMask a favorite wallet among users:
However, the main risk of using MetaMask is that you are responsible for your private keys and seed phrases. You may lose your crypto assets forever if you lose your seed phrase. Private keys can also be stolen if someone gets access to them (e.g., via an insecure computer or being hacked). MetaMask uses a computer’s browser to interact with DApps. It does not store user information, but browsers often track user activity. This is a concern for many cryptocurrency users.
Although MetaMask has not experienced any significant hacking issues, it is nevertheless susceptible to attacks because it is a hot wallet, or a cryptocurrency wallet connected to the internet. To further safeguard it, you should:
Save a copy of your recovery phrase and keep it confidential: This is the only way to regain your account. If you lose access to your browser, machine or device, this recovery phrase is the only thing that can bring your account back.
Never reveal your private key to anyone: Anyone who knows your private key or secret recovery phrase can access your digital wallet. Do not share these details with anyone.
Use MetaMask along with a hardware wallet: If you hold a large number of tokens, it is advisable to use a hardware wallet in conjunction with MetaMask.
The MetaMask crypto wallet is good for beginners since the interface is simple enough to understand and makes managing your assets easier than other wallets. It’s also accessible on multiple platforms.
Its utilization of hierarchical deterministic settings also allows users to backup their accounts using seed phrases — keywords you can use to retrieve your account. Furthermore, MetaMask keeps accounts secure by generating keys and seed phrases locally (only on the user’s device and browser). They do not provide third-parties access to your data or account, meaning only you and your device can access your information.