What is Metamask wallet, your first encounter with it

The Metamask wallet, which is actively used on a huge number of platforms, is in increasing demand among users. In this article, we will try to find the answers to a lot of questions about Metamask, which relate to the essence, usability as well as pros and cons of this coin purse.

Role of Metamask in the Decentralized Web

What type of wallet is MetaMask?

MetaMask is a hot multi-currency wallet that grants access to the Ethereum ecosystem, decentralized apps (Dapps), virtual exchanges (like Coinbase), and games built on the Ethereum blockchain.

One of the prominent features of MetaMask lies in the utilization of this wallet in any of the dApps, either Ethereum, the BNB chain, or any other network congruent with the Ethereum virtual machine. MetaMask also brings your identity to Web3. This will allow you to easily accede to services such as decentralized DEX exchange platforms, NFT token marketplaces, or blockchain gaming applications. To get started, you primarily need to find a dApp to use. Once inside, a connection request can be made automatically or manually, it all depends on the dApp.

The connection between Metamask wallet and decentralized applications is established using a JavaScript module (Web3.js or Ethers.js). The same module is used for interaction between the wallet and smart contracts. One of the innovations lies in an integrated Ethereum token exchange service by combining several decentralized exchanges to find the best exchange rate.

Using such wallets scales up the probability of stealing funds. That’s why it’s important to be extremely careful in ter,s of your gadget security as well as choose only trusted Internet connections. But for all the riskiness of the hot way of storing cryptocurrency, the MetaMask wallet continues to be sought after.

Features and Functionality of Metamask

Until 2019, Metamask has existed only as a browser extension for Chrome and Firefox. This became a problem because the lack of a mobile app connection allowed scammers to create wallet analogs in the Chrome Web Store and Google Play.

In Autumn 2020, ConsenSys Software Inc. launched an app for iOS and Android. The wallet has the highest level of usability, as stated by its customers. It synchronizes with any Ethereum blockchain platforms and applications, alongside any decentralized exchange (DEX), such as Binance. The Metamask wallet provides consumers with all the performance capabilities that may be required to work with cryptocurrency in today’s realities.

Storage and transfers

The main function of the wallet is that you can deposit Ethereum coins and all the stablecoins of this blockchain into it. Storage of funds in the wallet without any fees and making transfers through any Ethereum networks are available. Except for the gas fee, there are no commissions and no limits.

Buying and selling NFT

On DEX exchanges, you can buy and sell non-exchangeable tokens. The user’s collection of tokens is displayed on the main screen of the application. You can place tokens on suitable exchanges by participating in auctions and receiving funds from the sale of NFTs to your account.

dApps

The Metamask extension allows transactions to be made in applications on the Ethereum blockchain. It doesn’t matter which site you use for any particular app. More than 1 million apps have already been created on this blockchain.

Swaps

In an app, a user can swap any of their tokens for another. The system will automatically monitor all DEX exchanges and select the best offer so that the user has the opportunity to make an exchange on favorable terms with a minimum network fee.

Buying tokens

MetaMask allows you to buy a wide range of digital currencies directly from the wallet. The user simply clicks the “Buy” button, enters the required amount, and selects a payment method. MetaMask supports multiple fiat currency payment methods, including credit cards, debit cards, Apple Pay, Google Pay, Samsung Pay, and bank account transfers. The system selects the best quotes based on the region and available suppliers.

EIP-1559

Thanks to the principle, which was introduced in the EIP-1559 offering, transactions have been made at a fixed cost. Users were also given the ability to pre-select the pace of a transaction. For instance, high speed is preferred for swaps, which minimizes the risk of losing money.

Staking

Staking is making money by storing certain tokens. On MetaMask, stacking allows you to receive automatic interest for storage, just like interest on a deposit in a regular bank.

Security of Metamask

Metamask has three levels of protection such as a password, private keys, and a seed phrase of at least 12 words. To gain access to the user’s wallet, a hacker needs either the password and keys or the seed phrase. The private key in MetaMask is a cryptographic key, which is aimed at signing transactions and ensures the protection of user funds. The private key is confidential information and under no circumstances should be disclosed or transferred to a third party. Loss or leakage of the private key can lead to loss of entry to user funds. In terms of MetaMask, your personal keys are retained separately in the local storage of your browser, or in a secure compartment inside the latter, depending on the version of MetaMask. This means that private keys are stored only on the device you use, and not on any servers controlled by MetaMask or any other third parties. 

It is important to keep your device secure and regularly back up your seed phrase. If an attacker has physical access to a computer and can enter the container where the MetaMask private key is safeguarded, it is theoretically possible to use specialized software or hardware devices to attack the container and extract the key. If a customer has at his disposal a Trezor or Ledger hardware wallet, the risk of hacking and loss of funds is virtually eliminated.

Popularity of MetaMask

What is MetaMask used for?  Let’s understand why this wallet has become so popular. 

MetaMask works with the Ethereum network and its native currency ETH. It also supports all tokens of the ERC-20 standard, i.e. any cryptocurrency running on the Ethereum network. In addition, MetaMask supports other networks such as Binance Smart Chain (BEP-20 standard), Polygon Network (Matic), and Optimism Ethereum. MetaMask can also be used as a payment interface for hardware wallets such as Ledger.

One of the main features of this wallet that made it so frontmost is its easy connection to decentralized services (DeFi): exchanges, exchange services, and liquidity pools. The MetaMask extension allows you to work with platforms such as Uniswap, PancakeSwap, Biswap, etc. without registration and identification.

Advantages and Disadvantages of Metamask

Among the advantages of Metamask are the following:

• Ease of use: Metamask offers a simple and intuitive interface, making it accessible to a wide range of users, regardless of experience level. It only takes a few minutes to install and set up, and you’re ready to use the wallet.
• Multi-platform: Metamask is available as an extension for popular web browsers like Google Chrome, Firefox, and Brave, allowing you to access the wallet directly from your browser. This is convenient and makes it easy to perform cryptocurrency transactions without requiring additional software.
• Security: Hazard resistance is one of the key aspects of Metamask. Your private keys are encrypted and stored directly on your device, which means that only you have full control over your funds. In addition, Metamask allows you to create and manage multiple wallets, giving you more flexibility and an extra layer of security.
• Support for multiple cryptocurrencies: Metamask supports a wide range of cryptocurrencies, including Ethereum (ETH) and many ERC-20 tokens, making it an ideal choice for users preferring to trade various digital assets.
• Interaction with DApps and smart contracts: Metamask is integrated with many decentralized applications (DApps), allowing you to easily interact with the blockchain ecosystem.

Disadvantages include the following aspects:

• Support for Ethereum-like networks exclusively. Ethereum has a higher average price per gas than many blockchains. The user needs to learn the capabilities of EIP-1559.
• Network congestion often results in slowdowns. Sometimes transactions can take a long time (resulting in higher fees at the time of execution, among other things).
• It is less secure than a cold wallet. The MetaMask wallet has not had any serious incidents of hacking due to an exploit in the code. However, one of MetaMask’s key drawbacks is its connection to the Internet. This makes its individual users vulnerable.

FAQ

Which cryptocurrencies are supported by Metamask?

Initially, MetaMask supported the Ethereum network and ERC-20 tokens. Later the developers added connections to other blockchains. Today MetaMask works with ERC20, BEP20, and BEP2 tokens. However, you still cannot store some cryptocurrency market leaders such as Bitcoin (BTC), Ripple (XRP), or Cardano (ADA) because these blockchains are not compatible with Ethereum. The only way to store Bitcoin on MetaMask is to use an Ethereum-based blockchain such as Wrapped Bitcoin (WBTC), which mimics the BTC price but is actually an ERC-20 token. 

How do I add funds to my Metamask wallet?

By default, the wallet props up all tokens issued based on the Ethereum blockchain, and to get any token in the ERC-20 standard you need to indicate an Ethereum address.

It is not always rational to use only Ethereum. Quite often there is a need to conduct transactions using other altcoins and custom tokens. Let`s see how to add custom (unlisted) tokens to MetaMask if they are not appearing automatically in the assets section in Metamask. 

• Press the “Import Tokens” button at the bottom of the “Assets” tab on your wallet’s home page.
• Slam the “Custom Token” tab at the top of the page and enter the token address in the first field. In most cases, the token symbol and token decimal are filled in automatically. If not, go to the network block browser and look for the token. You will most likely see its token symbol and decimal. What is a token decimal on Metamask? On MetaMask, the “decimals” field for a token refers to the number of decimal places used to represent the token’s smallest unit. 

• Push “Add custom token” to continue. You will now see a page asking you to confirm the addition of the token.
• When you click the “Import tokens”, the token type will be added to your wallet.

Is Metamask free to use?

MetaMask does not impose any limits or fees. Using a wallet is free of charge. The maximum deposit amount and minimum withdrawal amount are not set. The commission depends on the selected network and the user’s preferences in the priority of the transaction.

It’s no secret that today’s commissions in the Ethereum network are simply huge. You can be charged with paying more than $20 for an ordinary transfer and even exceeding $50 or even $100 for an interaction with a smart contract or decentralized application. The price of the commission depends solely on “network congestion”. Usually, commissions go down at night or early in the morning.

In order not to check the cost of commissions every minute, and not to wait for the very moment when you manage to proceed with a transaction, in the Metamask wallet, you are able to configure its costs by yourself.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.