In this post, we will look into how to set up a MetaMask wallet, such that you can transfer your cryptocurrencies from your custodial wallet (the centralized exchange from where you purchased them-Coinbase, Kraken, Binance, etc.) to a non-custodial one (MetaMask) and become your own bank.
Let's first start with a short recap about the differences between a custodial and a non-custodial wallet. When using a custodial wallet, a third party (for example an exchange) has custody of the private keys that secure your wallet. In contrast, a non-custodial wallet allows you to manage your own keys, a pair represented by a private and a public key. The public key can be shared with everyone, you can think of it as your IBAN. In contrast, the private key must be kept secret at all costs, as it is the one that protects the assets and grants ownership.
If you want to become your own bank and make use of the full potential of blockchain technology, you need to use a non-custodial wallet. A non-custodial wallet will grant you access to a decentralized financial system, that is not dependent on any government or financial institution. The disadvantage when using a centralized exchange is that it must conform to the legislation from the country where it operates (for example if a government decides to shut down an exchange, or to ban it for the residents of a given country, it can order to do so). Another disadvantage is that exchanges are prime targets for bad actors and they can be hacked (eg: Bitfinex, Mt. Cox, Coinheck, etc). Additionally, there is the risk associated with infrastructure failure (servers, networks downtime).
A non-custodial wallet mitigates these risks. Nevertheless, the biggest challenge when it comes to non-custodial wallets is to manage your keys and to keep your private key secure.
In the remaining part of this article, we will look at how to create a wallet with MetaMask, a non-custodial wallet that comes as a browser extension.
Go to https://metamask.io/ and press "Download". Select the corresponding browser type that you are using (in this example Firefox). Next, go and press "Add to Firefox".
A pop-up will be shown asking you to confirm the different permissions of the extension, select "Add".
After this, the MetaMask extension has been added to your browser.
Click on the MetaMask fox icon. Then press on "Get started". You will then be asked if you want to "Import a wallet" or "Create a wallet".
In this example, we will create a new wallet. After selecting "Create Wallet", you will be prompted to create a password. Make sure to use a strong password and store it safely. After this, you will be shown a short video that explains more about the Secret Recovery Phrase/ Seed Phrase. A Secret Recovery Phrase is a 12-word phrase that corresponds to your private key to your wallet and your funds. In case you forget your password or you need to recover your account, you can use it and generate a new password.
Be wary that you will only see once the Secret Recovery Phrase when you create the wallet! You might want to store this phrase in a password manager like 1Password, or you can write this phrase on a piece of paper and store it in a secure location.
After this, you will be prompted to confirm your Secret Recovery Phrase by putting the 12 words in order.
After this step, your wallet is set. To see your public key, you can simply click on it at the top of your wallet.
-do not store your Secret Recovery Phrase in the cloud, you do not want a photo with the key to your assets in the cloud
-you can set up a MetaMask wallet either on your computer (like we did here), or using the mobile app. In case you are using the mobile app, please do not take a screenshot of your Secret Recovery Phrase (most likely your images synchronize with the cloud)
-if you want more security when storing your Secret Recovery Phrase, write it down on multiple pieces of paper and store each in 2 - 3 different locations, make sure not to forget their location