What is a web3 wallet & why you might need one?

what is a crypto web wallet
Learn Crypto Blog Learn Crypto Blog
Learn Crypto May 28 · 5 min read
  1. What is a Web 3.0 Wallet
  2. Introduction to MetaMask
  3. MetaMask for your browser
  4. MetaMask for mobile

DEFI and NFTs are two of the most exiting sectors within the wider crypto space. Everyone wants a piece of the emerging crypto pie. While blockchain technology that underpins cryptocurrencies is difficult to wrap your head around, there are fundamental things that can help you take the first step. One of those is a web3 wallet. 

What is a Web 3.0 Wallet?

Web 3 wallets are non-custodial. It means you can store digital assets securely without needing a middleman, but take ultimate responsibility. Users are in complete control of their funds and are responsible for keeping their private information safe.

There are already plenty of crypto wallets that offer self-custody - which is good practice - but web3.0 offers a completely different user experience more aligned with desktop applications than mobile, because the interactions are too complex for a small screen.

Web3.0 wallets are an ideal gateway to a whole host of crypto applications running on blockchains - like Decentralized Finance (DeFi), Gaming, Non-Fungible Tokens (NFTs) - that are best accessed and interacted with via a desktop browser. 

In addition to being a necessity for the DeFi world, Web3.0 wallets don't need you to complete daunting KYC/AML processes, preserving your privacy and anonymity. One of the most popular web3.0 wallets is Meta Mask

Introducing MetaMask

MetaMask is a browser plugin that serves as an Ethereum wallet. It allows users to store ERC-20 tokens and also enables them to make transactions to any Ethereum address. MetaMask recently surpassed 5 million monthly active users, having grown 500% over the past six months.

The wallet provides users with:

  • an entry point into the decentralised finance ecosystem to spend tokens on decentralised applications (dApps)
  • a way to stake tokens in DeFi protocols
  • a way to swap tokens on decentralised exchanges (DEXs)
  • a place to store NFTs

How does MetaMask work?

MetaMask allows decentralized applications to communicate with Ethereum networks easily and seamlessly. 

It achieves this by acting as a wallet, wherein users can store cryptographic tokens in addition to Ethereum-related data. The wallet works with JavaScript by injecting a Web3.0 object into the browser extension. This doesn't alter the website, however; it adds functionality to access the Ethereum blockchain. 

MetaMask works with JavaScript by injecting a Web3.0 object into the browser extension. This doesn't alter the website, however; it adds functionality to access the Ethereum blockchain. 

The wallet's ability to interface with websites positions it ahead of the competition because other wallets require you to manually copy-paste payment addresses. The wallet also has a browser extension, which allows users to ping their wallets and prompts them to accept or reject a transaction. Besides, the wallet offers an option for users to interact with dApps and smart contracts seamlessly. 

MetaMask on Computer

MetaMask can be used as an app or as a browser extension or plugin. Anyone can download it on a mobile phone or install it on a computer like any add-on. Here are the steps to using it as a browser extension.

  1. Go to Chrome web store, and type “MetaMask”. Click on Metamask and add it to the chrome.
  2.  Click on Get Started. If you have a seed phrase, click on ‘Import wallet’. If you don't, click on ‘create a wallet’ to set up.
  3. We will be using an old account. So, you can just enter the seed phrase to access your wallet.
  4.   If you want to create a new wallet, click on ‘create a wallet’, and you’ll be asked to create a password.
  5. Once you’ve set up your wallet, you can safely store your seed phrase because it cannot be recovered. Write it somewhere safe or keep it in a password manager.
  6.  The screen should look like this. Three options are available for you to buy, send, or swap tokens.
  7. Click on ‘Buy’ if you’d like to buy a token. You can buy Ether with Wyre, or deposit it directly from your account.
  8. If you’d like to send someone a token, click on ‘Send’. First select the token you wish to send, and then add the recipient address. Keep in mind that you’d have to pay the gas fee for sending tokens.
  9. To swap tokens, click on ‘Swap’. Select the tokens you’d like to swap, pay for the gas fee, and you can easily exchange tokens. The app version of Metamask doesn’t allow you to swap tokens directly. Instead, you need to search for a third-party app in the browser extension of mobile apps. This is explained in the “Step x” in the mobile section.
  10. You can create multiple accounts, which you can access by clicking on your account icon sitting on the top right corner. Select the account you’d like to use.
  11.  You can also choose the blockchain network you want to use. Click on ‘Ethereum Network’ and select the blockchain you wish to use.
  12. To add a blockchain to your wallet, click on “Custom RPC”. Click on the network you’d like to add and save it. For example, we are connecting Binance Smart Chain with MetaMask.
  13. If you like, you can also connect your MetaMask wallet to a hardware wallet.
Meta Mask Mobile

MetaMask on a Mobile Phone

MetaMask is also available as an app. Though it has limited functionalities comparatively, it is handy and can be accessed from anywhere at any time. Here are the steps to use the wallet as an app: 

  1. Download the application from the Android or iOS App Store. To create or add an account, you can follow the steps mentioned for the browser extension.
  2.  Upon logging, you’ll be directed to the following interface.
  3. Click on "Buy ETH" if you'd like to purchase Ethers. The app allows you to buy ETH with different methods, each differs on the country of the users. You can also deposit ETH directly from a centralized exchange. Suppose, I’d like to deposit ETH from Binance. Click on ETH Token, and select ‘RECEIVE”.
  4. You can copy the address and paste it on the exchange to withdraw funds to MetaMask.
  5. As already mentioned, you cannot swap tokens directly from the mobile app. To swap coins, click on the menu bar on the top right corner, and select “Browser”.
  6. You can search for the app you'd like to access. For example, we searched for UniSwap. Open the exchange, and click on "Use Uniswap".
  7. Select the tokens you want to swap. Click on “Swap”, confirm the transaction, and you will receive the token in your MetaMask wallet. 

Note that you’ll need to pay the gas fees.

Risks of Using MetaMask

Though MetaMask is a really useful tool, be aware that there are some risks associated with using it.

  • It's a third-party wallet, meaning your private keys are kept within the user's browsers. Though the wallet is extremely secure, it is still less safe than a hardware wallet. 
  • Instead of being a full node, MetaMask wallet depends on external nodes. We haven't seen a downtime yet, but there are chances that MetaMask can stop working in extreme conditions. 
  • Be aware that interacting withe Ethereum Smart Contracts can be costly in terms of Gas fees.

Web3.0 wallets are powerful tools for browsing the decentralised world. If you've followed our step-by-step instruction to using MetaMask, you've taken a big step to unlocking the potential within DEFI, NFTs and beyond.