Metamask is a piece of software that makes interacting with any blockchain as simple a few button clicks. You can spend and receive your crypto very easily without knowing code, as well as interacting with smart contracts and decentralized applications.
So if you haven’t already, you really should read our What is a cryptocurrency wallet article where we explain what public and private keys are and the different ways to store them. Understanding how they works makes understanding the Metamask software much simpler.
Basically, when you want to send some of your cryptocurrency to someone else, you need to use your private key to stamp your transaction and send it to other servers across the network.
Personally, I have no idea how to manually do this, and I have no idea what servers to send it to so that it gets on the blockchain. Metamask specializes in this. They take whatever you want to do it and turn it into the click of a button. In most cases, you are interacting with a website such as Uniswap or Pancakeswap, or even Cryptokitties. Metamask is the intermediary from those websites to you – acting as a security layer as well as an accessibility layer.
Nothing can go from your Metamask wallet to the website you’re on without your permission.
Think about it like this. When you go to the store and you buy some grapefruit, do you have your credit card number memorized? What about the day it expires and your security code on the back? No, almost nobody memorizes that… because it’s much easier to just swipe your card or insert your chip and let it do that work.
Metamask is essentially doing the same thing. With your credit card, the numbers are the data, and the card itself is the way you use them. With Metamask, your private keys are the data and the browser extension is the way you use them.
Here’s a quick video of me swapping some BNB for Tether on a decentralized exchange called Pancakeswap, and you can see how easy it is to do so with Metamask.
Just a few button clicks.
Is Metamask Safe?
Yes. The metamask app is actually very secure and trustworthy – you can be assured that their code source is public and has been audited by very intelligent and curious people. The main vulnerability you might have isn’t with metamask, but with the computer you use metamask on.
In fact, if you want to take a peek yourself, check out their Github: https://github.com/MetaMask/metamask-extension
However, if you have a virus and it wants to get into your Metamask folder, or it logs your keystrokes so it can tell what you’re typing – that would be one of the only ways someone could hack your Metamask account. However, this is not a fault of the browser extension, this is a fault of your own, for not using a secure computer… if that makes sense.
Another way someone could hack your metamask data is if you actually downloaded a fake version of metamask that was designed to look like the original but actually stole your private keys and could have access to your funds. Again, this would be an issue of where you initially installed Metamask, not a security flaw of the true Metamask software.
One important thing here for the nerds – it should be noted Metamask does not hold your keys… in fact they never even send them to their servers – your private keys and wallet passwords are always stored locally, only on the machine that you imported them to. This means Metamask is technically an offline software wallet that you turn on whenever you need to use it.
Creating Multiple Wallets
Metamask also allows you to create multiple wallets very easily.
For example, you just click “add new account” and boom you’ve got a brand new private key, which is essentially a new wallet address. This is useful if you want to keep certain funds in different accounts.
As you can see in the example we have two wallets, one containing 0.009 Matic and the other Wallet containing 0 Matic.
Both of these wallets contains their own private and public key and allow you to move crypto in and out of them.
Connecting Other Wallets
Importing other Software or Hardware Wallets that you have is also very simple. You can either connect using your Ledger or Trezor at the moment.
For example, let’s say that you have a Ledger Nano X and you have an account on there.
However, you set that up a year ago and with the explosion of decentralized applications, you want to move that money to your Metamask account so you can interact with those dApps.
Well, instead of transferring your tokens and coins to a new address and paying those fees – you just plug your Ledger or Trezor Wallet it in.
At that point it then connects to the wallet and boom now it’s in your Metamask wallet. A fun fact about hardware wallets is it actually doesn’t use your private key, it contacts your ledger wallet and then has you verify whatever transaction you are confirming.
In short, Metamask is great at allowing you to create multiple wallet addresses, as well as importing wallets that you already have
How does Metamask make money?
Metamask makes money as a company by charging a very small fee to users who buy, sell, or swap using their browser extension.
Whenever there is a product that works very well, but doesn’t cost anything to you, you know there’s a hidden price. So we did some research and found out exactly how metamask makes its money – because it is a company and it does employ developers.
1. Buying Crypto
One is that using metamask, you can buy crypto straight to your wallet using a third party. Metamask makes a very small fee for every buy and sell, but these small fees add up because they offer a great product and a ton of people are using it. Kinda like how some credit cards charge a transaction fee and that’s how they offer rewards – so many people are using them that they can afford to offer rewards.
Well, so many people are buying crypto with metamask that they can offer a reliable, trusted product.
2. Token Swapping
Secondly, they allow you to swap tokens – say from Ethereum to Basic Attention Token. Well, they charge a super low fee on that too.
For many newbies of crypto, it’s much easier to swap their tokens with Metamask with their little browser extension and not have to worry about getting an address wrong than it is to go to a site like Pancakeswap or Uniswap and do the following:
- Enter the contract address of the token you want to buy
- Change the slippage so the transaction will go through if it needs it
- Ensure that the gas fees they use are high enough to make it reasonably fast.
It makes understanding and navigating the crypto world a little easier for newer beginners.
Essentially, Metamask makes money by taking small fees out of buying, selling, and trading using their software.
So, in short, Metamask is a software wallet that you use while browsing the web and interacting with decentralized applications. They can store multiple private keys and can work on different networks, such as Ethereum and the Binance Smart Chain. Metamask is free to download and use, it’s also safe, and that’s why it’s one of the most popular cryptocurrency wallets.
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