Every person who deals in cryptocurrency needs a reliable wallet to store said cryptocurrency. For day-to-day transactions, most people prefer online or ‘hot’ wallets. Such wallets are always connected to the internet making it easy to move cryptocurrencies from one place to another.
One of the most widely used hot or online wallets is MetaMask. Launched in 2016, this Ethereum wallet now has over 21 million active monthly users. Apart from being a storage facility, MetaMask also serves as a gateway to Web3 by enabling users to securely access a variety of decentralized applications(DApps).
When talking about a crypto wallet with such wide functionalities, you may have several questions in mind. What is MetaMask used for? Is MetaMask a safe wallet? What is the disadvantage of MetaMask? This article will answer all your questions regarding the MetaMask wallet.
What is MetaMask Wallet?
MetaMask is a cryptocurrency wallet used for securely storing virtual coins and NFTs. It is a widely popular wallet that supports not only the Ethereum blockchain but also layer-2 solutions like Polygon and blockchains like the Binance Smart Chain.
MetaMask was developed and launched in 2016 by a blockchain software firm called ConsenSys. It is a non-custodial wallet letting users retain control of their private keys. The wallet is available as both a mobile app and browser extension that is compatible with several browsers such as Chrome, Firefox and Brave browser.
In 2020, MetaMask introduced a built-in DEX aggregation service to its browser extension called MetaMask Swaps. The same was made available on the mobile app in 2021. Further, in 2023, MetaMask started allowing users to buy cryptocurrencies with fiat money directly from the wallet interface.
Therefore, the MetaMask wallet today supports not just storing but also purchasing, conversion and swapping of cryptocurrencies.
How to Use MetaMask
Setting Up an Account
Step 1: Visit the MetaMask website on your preferred browser. Click on Download and then on Install MetaMask.
Step 2: Next, click on Add to Chrome or Firefox. A pop-up will be displayed where you have to click on Add Extension.
Step 3: Alternatively, you can also go to your browser’s extension and install MetaMask from there.
Step 4: After adding the extension to your browser, you need to configure your privacy settings. For this, go to Advanced Configuration and configure settings such as phishing detection and token autodetect.
Step 5: To install the MetaMask mobile app, search for the app on the Google Play Store or the iOS App Store.
Step 6: Download and install the app on your phone. You will be directed to create a wallet including setting a Secret Recovery Phrase. Once this is done, you can start using your MetaMask wallet.
Buy Transactions
To buy an ERC-20 token on MetaMask, first go to your wallet’s homepage. There you will find the Buy option. Apple Pay, debit and credit cards are some payment methods supported by MetaMask.
Your screen will display information about the cryptocurrency you are buying including the slippage fees involved. Verify all the details before proceeding. After the transaction is processed on the Ethereum blockchain, your wallet balance will also be updated.
Send Transactions
To send a cryptocurrency to another wallet, click on Send and enter the public key. Then, choose the asset and the amount that you want to transfer. Verify the details once and then click on Next to proceed further.
Remember that transactions with lower gas fees can fail due to network congestion. You can, therefore, change the estimated gas fees to expedite your transaction though it is not mandatory. Your transaction will be verified after you click on Confirm.
Swap Transactions
To swap one crypto token for another, first click on the Swap button. Enter the token and the amount in the “Swap from” column. Similarly, select the token that you want in the “Swap” field.
Next, enter your slippage percentage in the Slippage Tolerance section. Click on Review Swap after which MetaMask will display rates aggregated from DEXs. This includes the best quote and gas fees for your swap transaction. Click on Swap if you’re satisfied with the quote. Your transaction will be completed in a few minutes after which you can view it in transaction history.
Advantages of MetaMask
Easy to Use
MetaMask is a very user-friendly crypto wallet. The wallet setup process is quite simple and you just need to download the mobile app or install the browser extension to get started. The set-up process is uncomplicated and you will find ready instructions for every step.
Supports a Large Number of Tokens
MetaMask was developed primarily for Ethereum-based tokens and, therefore, supports a wide variety of ERC-20 tokens. This means that you can store multiple tokens such as ETH, USDT, USDC or any other ERC-20 token in one wallet. Hence, you can easily manage and interact with your crypto assets.
Staking Opportunities
MetaMask provides you with several opportunities to earn rewards through asset staking. The wallet also has frequent airdrops where you can get additional tokens. Thus, you don’t need to depend on centralized exchanges to stake your assets.
Cold Wallet Integration
As MetaMask is a hot wallet, it stores crypto assets online. This makes them more vulnerable to cyber attacks. However, MetaMask has integrations with cold wallets like Ledger and Trezor that are much more secure than the average online wallet.
Access to DApps
MetaMask is not merely a wallet where you can store your crypto tokens. It also acts as a DApp hub where users can access various DApps. Thus, you can explore a decentralized ecosystem and interact with Web3 applications with MetaMask.
Disadvantages of MetaMask
No Support for Bitcoin
MetaMask is an Ethereum wallet i.e. it only supports ERC-20 tokens such as ETH or UNI. Hence, you cannot store Bitcoin, the most popular cryptocurrency, in this wallet. This can be a deterrent for users who primarily hold Bitcoin or non-ERC-20 tokens.
No Crypto-to-fiat Conversions
It is difficult to directly convert cryptocurrencies to fiat money with MetaMask. The wallet does not support third-party remittance companies. Therefore, you need to look elsewhere or go through a few extra steps to convert the crypto stored in your MetaMask wallet.
Not Completely Anonymous
While MetaMask is a good and popular wallet, it is not completely anonymous. Anybody can scan a wallet address to find the transactions done by that wallet and their monetary value. These transactions cannot necessarily be traced to a particular user but still, MetaMask might not be a good fit for traders wanting a high level of anonymity and privacy.
Poor Customer Support
Customer support is not a strength of MetaMask. If you’re expecting live customer support or one that is available 24/7, look elsewhere. You won’t get that here, which considering the technical nature of crypto wallets, can be a drawback.
Is MetaMask a Safe Wallet?
MetaMask is a non-custodial wallet which means that it does not ask for control over users’ private keys or funds. It does not collect much in the way of personal information and you can set a 12-word seed phrase to secure your private key. You can also set a MetaMask password as another layer of defence.
The MetaMask mobile app also supports biometric authentication that you can enable for security. However, do remember that if you enable facial recognition, you don’t need to enter the password each time.
That said, MetaMask at the end of the day is a hot wallet that are constantly online. They are, therefore, much more prone to cyber attacks than hardware wallets. Phishing and keylogging attacks are common ways through which online wallets like MetaMask can be compromised.
It is because of these reasons most crypto traders prefer keeping a small amount in their hot wallets for day-to-day transactions and store the majority of their assets in cold wallets like Ledger.
The Bottom Line
MetaMask is an acclaimed cryptocurrency hot wallet that is compatible with multiple blockchains and works with several devices- whether iOS or Android. The wallet has gradually gone from being mere storage space to offering many services such as staking within its interface.
MetaMask is valued for its relatively simple interface and ease of use that enables users to conveniently trade cryptocurrencies. It focuses on removing intermediaries and plays a key role in improving access to DApps. Therefore, MetaMask is a good option if you’re not planning on holding any non-ERC-20 tokens and would prefer the earning opportunities offered by the wallet.