MetaMask is a digital wallet that was developed by ConsenSys on Ethereum’s blockchain. MetaMask is a non-custodial wallet, which means that it does not keep a keychain of your private keys (passwords). ConsenSys is a software engineering company that builds dApps on Ethereum’s blockchain. The project primarily builds DeFi (centralized finance) apps, which includes MetaMask.
Metamask is a wallet that works as a browser extension. That means that MetaMask will bridge between normal browsers and Ethereum’s blockchain. Ethereum uses This wallet works with Chrome, Firefox and Brave browsers.
Non-custodial apps increase user autonomy as well as security because users store their own private keys. As such, if there is a data attack MetaMask does not have a copy of users’ keys. It also means that if you lose your private keys the funds unrecoverable because MetaMask cannot recover your password.
With MetaMask users can access Ethereum’s dApp ecosystem with greater ease, it does this by holding ERC-20 tokens. These tokens (cryptocurrencies) enable users to access services built on the app. So, the wallet functions both as a bridge and a source of funds.
MetaMask is used to store keys for Ethereum cryptocurrencies only. The problem with dApps, is that for many, they are too technically complex. MetaMask is an effort to bridge the gap between the decentralized web and regular internet users.
In 2017, one of the most popular dApps was CryptoKitties. CryptoKitties is a game where you collect digital cats, name them, trade them for cryptocurrency, and make general merriment with the cute digital playthings. In 2017 dApp crashed when it was overwhelmed by 1.3 million transactions. However, since then, user numbers have dropped to the hundreds.
The diversity of Ethereum’s decentralized apps have continued to increase over the years. However, the use of dApps has not been adopted as quickly as hoped, due to their complexity, as well as limited functionality. MetaMask is a ConsenSys dApp that aims to increase usability.
ConsenSys is an engineering company that has built multiple DeFi apps on Ethereum. The company is also heavily invested in the mass adoption of Web 3.0. Web 3.0 enables distributed users and machines to interact with data, value and other counterparties.
Web 3.0 is the future of computing, where data transactions are made via a substrate of peer-to-peer networks without the need for third parties. The ideal is an internet that is human-centric and preserves user privacy.
Most MetaMask transactions are primarily initiated by dApps rather than by human users. This means that MetaMask users use the wallet for interacting with Web 3.0 applications, such as Compound or MakerDAO, rather than send ETH and ERC-20 between one other.
MetaMask users rely on the Ethereum blockchain network. Ethereum is a blockchain that is built for others to build projects on. Many of the dApps built on Ethereum are other cryptocurrencies. Bitcoin also runs on blockchain technology; however, Bitcoin has its own blockchain. Ethereum is funded by its own cryptocurrency Ether, and dApps can be used on the blockchain with ERC-20 tokens. This is why users need wallet/browser extension, such as MetaMask.
dApps are the heart and soul of Ethereum. They are applications that run primarily based on backend code, called smart contracts. dApps and smart contracts are all a part of the automation and code that makes decentralized networks possible. The Ethereum blockchain is used for data storage and runs by way of the logic/code that the app is built with.
Decentralized apps rely on the code of smart contracts to run operations, which means that a centralized server, run by an individual or company, does not need to approve transactions. A smart contract is a set of rules that dictate how an app will run. They rely on simple code which uses logical formulas to complete transactions. As such, the code of smart contracts mediates agreements and transactions, because without the correct funds or private keys the code is incomplete or incorrect.
Because smart contracts are not controlled by central authorities, they run as long as they are used. This is because the logic of the contract operates based on transactions and use and need. So, a dApp could become dormmate or obsolete due to lack of interest, but it cannot be removed or uncreated from the blockchain.
ECR-20 plays a central role in running Ethereum dApps. ERC-20 is a technical standard used to run all smart contracts on the blockchain. ERC-20 provides a list of rules that all Ethereum-based tokens must follow. The main difference between ERC-20 and other cryptocurrencies, such as Bitcoin or Litecoin, is that these run on their own blockchain. While ERC-20 tokens are issued and run on the Ethereum network.
It is used by many dApps, which means that users can use MetaMask to access a whole range of other dApps on Ethereum.
MetaMask uses a list of words, or a key phrase, rather than a string of obscure numbers and letters. MetaMask allows you to store your private key in the form of a mnemonic phrase. Private keys come as a 12-word human-readable phrase. This means that users only need to remember, or rather write down on a piece of paper, a list of words that function as the password/private key.
MetaMask lets users access the Ethereum blockchain without downloading the whole network onto their computer. Instead, MetaMask can send requests to nodes (computers running the network) from a standard computer.
MetaMask lets users set the fees of their transactions based on the urgency of the transactions. This is listed under “Advanced Options”, which makes setting the gas fees possible. If the transaction is urgent, users can pay more to have it completed faster, and vice versa.
Several limitations of MetaMasks functionality merit consideration. Firstly, MetaMask does not hold private keys, but browsers will hold them in the keychain. This is not as safe as keeping private keys in a hard wallet, or a piece of paper. That means that if the private keys are lost, then so is access to the account.
Moreover, MetaMask relies on external nodes, because it is not a full node, which means that it needs other networks to run.
Another criticism is that MetaMask does not allow native meta transactions. Meta transactions allow gasless transactions where the end-user does not have to pay a gas fee. This means that users can instantly interact with DeFi and other Web 3.0 apps without the need to load their account with Ether to pay transaction fees.
MetaMask is a Web 3.0 application which aims to enable more personal data and increase user privacy. However, critics have pointed out that because MetaMask is a browser extension there is potential to leak private information for data collection networks and web trackers.
The wallet only works on Ethereum, which means MetaMask does not support other cryptocurrencies such as Bitcoin or Litecoin. Users are still able to access wBTC and many stablecoins. Stablecoins are emerging as a crucial application for Ethereum and a core aspect of DeFi.
V8 improves the integrity of the wallet and increases developer usability. Security is increased because the user now has access to control options for each web domain for an account held within that wallet. Users should still use other security measures to protect data, including closing other browsers while operating MetaMask.
The MetaMask V8 update expands the potential for developers to build their own projects in the ETH ecosystem. Developers can now more effectively use permissionless protocols, including InterPlanetary File System (IPFS) and Ethereum Name Service (ENS).
Once MetaMask has been installed, it works a lot like sending paying a bill or shopping online.
MetaMask also uses QR codes to receive payments.
MetaMask Mobile is now available for iOS and Android. The app is not a browser extension, which means it is not exactly like the desktop version. On a smartphone, MetaMask is a native cryptocurrency wallet. It has the ability to interact with other dApps by entering the dApp’s URL into a built-in browser.
Cold storage is essential for security. If you have a significant amount of cryptocurrency on your MetaMask wallet, it is highly advisable that cryptocurrency is stored on a hardware wallet. This is a piece of hardware that keeps your cryptocurrency offline. Examples of hardware wallets are Ledger and Trezor.
To ensure that you are using MetaMask with the privacy mode on, check the following:
Another browser-based wallet with access to dApps and Ethereum transactions.
Accesses dApps that work with Mist wallet, which uses a full node Ethereum wallet.
Another popular wallet that accesses Ethereum coins and tokens.