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How to use Metamask: a guide for beginners

Let’s walk through how to use Metamask and some of the most common actions. Once It’s installed click the extension icon and you’ll see this view.

From here you can

  • View your balances of Ethereum and tokens.
  • Buy
  • Send
  • Swap
  • Copy your address
  • Switch network (blockchain)

How to add tokens

Sometimes your tokens don’t show up in your wallet. Then you need to add the token address.

  • Click Add Token.

Find the correct token address (for example on etherscan.io)

  • Paste it under Token Contract Address
  • The other fields should auto-fill.
  • Click Next.

On Coingecko you can add tokens with one click.

How to send tokens

  • Click send.
  • Paste the address you want to send to (make sure to double-check).
  • Select amounts and asset.
  • Select transaction fee.

In order to use Ethereum you have to pay a fee. Fees vary depending on how complex the computation is (send being the simplest) and how many people want to use the network at that time.

If you’re impatient click Advanced.

  • Select fast
  • Advanced
  • Add a few GWEI and increase Gas Limit a little.
  • Save.
  • Send transaction

It usually goes through in a couple of seconds.

We always use fast when a lot of people are using the network. Waiting for a transaction sux.

How to cancel a transaction (or speed it up)

  • Click Activity
  • Click Cancel on your pending transaction.


If you select a low gas fee and want to speed it up:

  • Click Speed up.
  • Select fast
  • Increase GWEI and Gas limit if you want it to confirm right away.

How to buy Ethereum

In Metamask you can buy Ethereum with credit/debit card via Wyre.

  • Click buy.
  • Fill in information and card.

Don’t forget that all your information is now linked to this Ethereum address and you’re completely doxxed.
It’s the case with pretty much every service but just be aware of it.

How to Metamask: rename account

  • Press the three dots
  • Account details
  • Click the pen.
  • Write a new name for the account.

How to reset account

  • Click Settings
  • Click advanced.
  • Click Reset Account and you’re done.

How to logout

  • Click your account icon.
  • Click lock.

How to remove Metamask extension

  • Settings
  • More settings
  • Extensions
  • Move the slider to the left

How to uninstall Metamask

  • Backup your seed phrase(!)
  • Click remove

If you’re trading you might want to read our post on crypto taxes.

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What is Metamask?

What is Metamask?

Metamask is a cryptocurrency wallet for interacting with Ethereum and other blockchains. It can be used as a browser extension and app to create wallets that hold your cryptocurrency.

It allows users to manage accounts and keys while isolating them from the site context. This is a security improvement over storing the user keys on a single central server, or locally.

You can install it as an app on your phone or as a browser extension.

What does Metamask do?

  • Create a wallet that can hold Ethereum and tokens.
  • Interact with Ethereum and other blockchains.
  • Send, receive and swap between cryptocurrencies and tokens.
  • Buy cryptocurrencies with debit/credit card

Full walkthrough on how to use it here.

Installation

Is Metamask safe?

Short answer: pretty safe. There are varying degrees of safe. It is the most used, well known and trusted Ethereum wallet. Although someone would probably not be comfortable holding millions of a dollars in a browser extension.

Safety Measures

  • Use a separate computer for signing transactions (literally a laptop solely for that)
  • Keep your seed phrase on 2-3 papers in different locations
  • Use a hardware wallet
  • Use in combination with a multi-signature wallet, like Gnosis Safe, is a good extra safety layer.

Safety Pros

  • Keys isolated from site
  • Can be used with hardware wallet

Safety Cons

  • Run by a centralized company
  • Recently went closed source.

Read and change all your data on the websites your visit

This pops up when you install then extension. In order to access web3 it needs to inject javascript on the page.
You could create a browser profile solely for Metamask and flip between profiles when you’re not using it.

General computer security

For normal users the largest security threat is probably how aware the user is of computer security in general.


Healthy practices involve

  • Not clicking links you’re not familiar with
  • Not installing software you’re not familiar with
  • Checksum on any executable files
  • Not opening files sent to you that you’re not sure about
  • Double-checking addresses in the browser

What coins does Metamask support?

Ethereum was the first network to be supported by Metamask. Now it can be used with several blockchains like:

  • Ethereum – ETH and ERC-20 tokens.
  • Binance Smart Chain – BNB and tokens
  • xDai Stake – xDai and tokens
  • Matic Network
  • Huobi Eco Chain
  • Fantom Opera
  • Avalanche Mainnet


For now you can’t store Bitcoin in the wallet. You would first need to wrap your Bitcoin to wBTC or tBTC and transfer it to Ethereum for example.

Coins Metamask can’t hold

  • XRP
  • Cardano
  • Bitcoin
  • Dogecoin

TLDR

What is Metamask?

Metamask is a a browser extension and app for interacting with Ethereum and other blockchains. In Metamask you can create a wallet that holds your ETH and other tokens.

What does Metamask do?

Create wallet. Send, receive, swap between cryptocurrencies on different blockchains. Buy cryptocurrency with credit/debit card.

Is Metamask safe?

Short answer is: pretty safe. If you use it with a hardware wallet, secure your seed word, practice healthy behaviour around links and installs. You’re probably fine.

Can I use Metamask on my phone?

Yes. It’s available for iOS and Android.

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Metamask chrome extension installation guide

Step-by-step guide on how to Install Metamask in Chrome. And create a wallet at the same time.

metamask chrome
metamask
  • Search for Metamask.
  • Make sure you click the correct plugin (plugin site, top plugin, amount of installs and reviews).
metamask chrome wallet
  • Add to Chrome.
metamask extension
chrome metamask
  • Sharing data is not really the spirit of crypto.
metamask
  • Choose a password (multiple characters – one that you don’t use anywhere else)

You can chose to not reveal you seed phrase and just store the file.

Potential problems

  • Keeping it on a computer or anything connected to the internet is not great.
  • Revealing it could expose it if your computer is hacked.

Your seed phrase is the master key of your wallet. It can be used to recreate the wallet and any account you have created with it.

  • Either write it down
  • Write it down in parts and spread it to different locations.
  • And/or memorize it.

This is the power of cryptocurrency. You can store all your money in your head. If you remember twelve consecutive words.

  • Click the words in the correct order
  • Congrats. You now have Metamask chrome extension installed.

We noticed it doesn’t show as an extension right away. To reveal Metamask in chrome:

  • Click the puzzle piece.
  • Click Pin.

Check out our post on How to use Metamask or read more about crypto tax.

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A complete guide to taxes on crypto

This is not financial advice or tax advice. Just entertainment obviously.

Doing taxes in DeFi and crypto is a massive headache. Especially if you’re using bleeding edge protocols.


How taxes on crypto works is different in every country and you should make sure you understand it before you make any trade. You will regret not doing it.

Table of contents

Problems we wanted to solve

  • Understand transactions from a tax perspective.
  • Be able to assess taxes before every transaction.
  • Not have to doxx both blockchain addresses and personal information.

How taxes on crypto work in general


In general tax is calculated when you sell. And have a realized gain.

Example

  • Jan 1
  • Buy: 7 Ethereum
  • Price: $200
  • Nov 30
  • Buy: 3 Ethereum
  • Price: $750
  • Dec 30
  • Sell: 3 Ethereum
  • Price: $1000

Tax for the sell is calculated like this:

Sell price – Cost basis = Realized gain x TaxRate

What is Cost Basis?

The method for this varies between countries. These are some common ways to calculate it.

FIFO

Certain countries use FIFO. First-in-first-out to calculate cost basis for every sell.
The sell order of 3 Ethereum in our example starts from the first purchases as cost basis.

  • Cost basis = $200 / ETH

LIFO

Certain countries use LIFO. Last-in-first-out to calculate cost basis for every sell.
Every sell of Ethereum starts from the last purchases as cost basis.

  • Cost basis = $750 / ETH

Average Cost

Certain countries use Average Cost. Average cost is calculated from the total cost purchases divided by the total number of units purchased.

Cost basis:

  • 7 ETH x 200 = 1400
  • 3 ETH x 750 = 2250
  • 3650 / 10 = 365
  • Cost basis = 365 per ETH


Example – Calculating taxes on crypto

Let’s say our country applies Average Cost Method.
The capital gains tax on crypto trades is 40%.

Sale: 3 ETH for $1000
Cost Basis. $365 / ETH

Sell price – Cost basis: 1000 – 365 = 635
Realized gain x TaxRate: 635 x 0.4 = 254
Our sell of 3 ETH: 3 x 254 = 762

Tax
$254 per ETH
$762 in total for this sale.

Cost basis after sell
Total ETH: 7
Total cost: 3650
Cost basis: $521.42

Make sure you double check this with a tax professional.

Where it’s get complicated is when you have 40 different coins and 100 purchases and sells per coin. That’s when you want to use a service/software.

Services

These are services which we’ve paid for and tried out. We have an affiliate link to Koinly because it was the one that solved our problem.

Koinly

Summary

Understand transactions: You can select and categorize every transaction from multiple categories.
Control: Easy to get an overview and to work through your transaction history.
Doxx: Only blockchain. No personal info.

How to not doxx when signing up

  • Create an e-mail that you only use for this service.
  • Get a VPN.
  • Sign up.
  • Submit your exchange data in CSV and remove any personal info.
  • Pay for the service in BTC, ETH, Dai from one of your wallets.

Done.

Setup

  • Configure settings for country and currency.
taxes on crypto
tax crypto
  • Add your wallets.
crypto taxes
  • You can add exchanges and Blockchain addresses.
  • You can sync via API or manually a CSV file to import your transactions.
taxes on crypto

Checking transactions

Once you have your wallets imported you can go through transactions from the beginning to see that they’re correct.
We had no issues with CSV or exchange imports. The ETH addresses needed few tweaks though.

  • Click transactions or wallets -> transactions.
irs cryptocurrency
  • To the left you can select any of your wallets.
  • Filter on different types of transactions
  • Filter on currencies.
cryptocurrency taxes

Here you can go through every single transaction and make sure it’s correct.

  • Select transaction
  • Click link to check the transaction on etherscan if you don’t recognize it.
taxes crypto
  • Click the 3 dots to edit or tag the transaction.
taxes on crypto
  • Change type of transaction if needed.
  • Select/change wallets.
  • Make sure the USD value is correct.

Finishing Tax Report

  • Once you’ve gone through everything you should have correct balances in your dashboard.
  • If there’s any errors in your ETH wallets Koinly will notify you.

  • Click Tax report.
  • See your full tax liabilites
  • Download reports for totals and separate coins.
  • Get warnings if there are any remaining errors.

Cointracking

Summary

Understand transactions: You can select and categorize every transaction from multiple categories.
Control: Not easy to go through and correct transactions.
Doxx: Only blockchain. No personal info.

Signup

  • You can create an account without doxxing in the same way as on Koinly.

Setup

  • Add exchange wallet via API
  • Or import CSV / Excel files.
  • Here you can view and go through your trades.

    The problem is that it’s hard to correlate trades between different wallets and exchanges. And to get any sort of overview.
taxes crypto
  • View realized/unrealized gains
  • Balances
  • Trades
  • Portfolio

TokenTax

Summary

Understand transactions: You can select and categorize every transaction from multiple categories.
Control: Not easy to go through and correct transactions.
Doxx: Paying in crypto wasn’t possible in 2020.

Setup

  • Add exchange wallet via API
  • Or import CSV / Excel files.
crypto taxes
  • The interface is not as clunky as cointracking.
  • See realized/unrealized gains.
  • Download reports.

The problem here is similar to Cointracking where it’s hard to correlate transactions and go through your trades when something’s wrong.

Hope this helps you out. Read more about getting started in DeFi in our post.

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What crypto trading really costs

If you’re just starting out it’s easy to not realize what trading really costs you.

Fees

In a bull market a lot of people want to use blockchains, so the transactions fees go up a lot. If you’re thinking of trading on an Ethereum DEX you should probably have atleast $2000 – 3000 since the fees are $20 – 100 per trade. Consider using a Layer 2 sidechain or normal centralized exchange if you’re starting with a small amount.

Tax

Obviously not tax advice. And this is different in every country. But in general you need to calculate your cost basis for every trade. So lets say you trade for 2 months.

  • Buy some ETH
  • Sell for shitcoin A
  • Buy back ETH
  • Shitcoin B
  • Shitcoin C
  • Back to ETH


During this time ETH goes from $300 – $1500.

For every sell your cost basis for ETH is lower than the current price. And you need to pay taxes on the difference (country specific).


In some countries your cost basis is a median of your buys, in some you sell from last purchased, in some from first purchase. But the idea in terms of cost basis relative to price is the same. So just realize it might cost you alot in taxes just to make the trade.

Time

When you put a lot of money into crypto you put a lot of your attention there aswell. Checking the price every 5 minutes. Worrying. Looking for the next investment idea.

It can take a lot of time. And probably should if you want to do it right.
This is time that could be spent doing <useful thing>.

It’s boring but buying and HODLing is not a bad strategy.

Addiction

It’s kind of like the ultimate computer game where the end game is making a lot of money.

This also means it’s addictive as hell. We call it a game, someone else might call it a giant casino. Just be aware of it. A lot of it is similar to gambling.

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How to manage emotions when starting in DeFi


Not financial advice ser.

There are a couple of ways your emotions can get the best of you when trading and investing in crypto and DeFi.

Greed

Have you just joined crypto and notice yourself doing this?

  • Manic intake of information
  • Taking more and more risk
  • Not satisfied with a 300% gain


That’s pretty characteristic of greed. It can be a great feeling.

The difficulty is keeping your head straight and realize whn you should sell or de-risk.

A way to notice extreme euphoria and greed is took look for it in others. You can think of crypto twitter and youtube as indicators that serve you. Being aware of the actual mental state is a good starting point to being able to manage it. And to think about what is emotion and what is actual thinking.

Losing money because of greed is can be a good way to learn though.

FOMO

Fear of missing out is often what get’s people into crypto. It’s that feeling when your friends are having fun without you.

It plays out as chasing pumps and selling bottoms.

How to deal with FOMO

Having a short time horizon makes you FOMO. And then panic sell if the price goes down. Probably it depends on how emotional you are as a person.

One approach is to figure out a longer term thesis before you think of buying. This involves learning and studying. Although it doesn’t only have to be tech specific.

It can be:

  • sentiment
  • a new sector
  • a new narrative.

One approach

1. Figure out a thesis around a token.
2. Warren Buffett-meme: I’m buying ____ because ____.
3. Do you know something the market hasn’t realized yet?

It can also be inverted like: How would you recommend this buy to someone else? Why and when would someone sell this?


Example
Ethereum fees are starting to get high. People are complaining. Some will try out other L1s and L2s. What chain or protocol will people move to?

A second approach

Keep track of great projects and buy them when they’re at their lows. It’s like the opposite of FOMO. You’re being patient and chasing lows instead of highs.
We’ve missed out on many opportunities like this because we didn’t take action when the opportunity came.

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Getting started in DeFi – and how to avoid common mistakes

These are some areas where we screwed up when starting out. This is not financial advice ser.

When are you entering the market


Pull up the Bitcoin/USD chart, select Daily or Monthly. Does it look something like this?

If it does be a little bit careful. Nothing goes up forever. You’re in a bull market which might end soon or in a while.

If it doesn’t look as extreme, well done.


Your first bull market is for learning. Losing your money is honestly a good learning experience as long as you don’t end up homeless. Crypto has so far had a bull market every 3-4 years which is pretty crazy compared to other markets.

Taxes

This is the thing that can really make you sad. In many countries every trade from crypto to crypto, or crypto to USD is a taxable event. You need to calculate your cost basis and your realized profit/loss every time you do this.

Read more about crypto tax in our post.

Buying with USD

Going from USD to crypto is pretty cumbersome. You need to KYC (know your customer) which means sending a picture of your driver’s license and all information about yourself. As of right now you pretty much have to just take it. Unless you want to buy for cash in a backalley.

Standard choices: Coinbase, Binance, Gemini

Buy directly to blockchain wallet: Transak, Ramp Network
Might be less infringement with these but probably not much difference.

Using a blockchain wallet

Generally – if you want to buy an NFT or use DeFi you want to connect to Ethereum. The most used Ethereum wallet is Metamask. It can be used as an extension in your browser.

  • You install it.
  • Create a wallet.
  • Write down the seed words – which means you can restore the wallet.
  • You’re good to go.

You’re your own bank when you have a blockchain wallet. Which means you have to take security seriously.

Some examples of how you lose your money interacting with your own wallet

  • Pretty much every crypto website has a similiar scam phising site advertising on Google – always check every website you’re visiting so it’s the correct one.
  • You have a lot of browser extensions installed and one of these are malicious or gets compromised.
  • You install a file with a virus. A good way to mitigate this is to be very careful with what you install.
  • You open a malicious file. It can literally be a .docx file.

Emotions

If you go all-in on a coin you’re attaching both your ego and all of your money to that decision. Which makes it a lot harder to admit being wrong. And to think clearly around that decision. Some coins have armies of people that are completely lost to the cult of their investment.
Although some people can do well financially with this, it may not be great for your life. And hard to sell at the right time.

In a bull market everything goes up.
When we bought our first tokens they went up a lot. And we thought we were geniuses obviously. But let me tell you. That was pretty far from the case.

Information

You will start looking for information. The problem with crypto is that whenever someone says anything they probably have a financial interest in doing so.

The mildly positive thing about this is that you really really need to learn to not trusting any information without verifying yourself.

Misinformation examples


Twitter

Influencers sharing “ideas” about coins. Often this is when they want to exit their position which they had long before tweeting. You are their exit liquidity and they dump on your head.

Or anyone speaking about any coin or token generally means they own it. When you have a huge financial incentive in a token going up – your world view easily gets biased to that incentive.

Fear uncertainty doubt
There has been this recycled FUD about Tether (USDT) not being backed and being close to collapse for like 5 years. Recently put to rest by a court ruling.


Narratives

  • During 2017 we had “Chinese New Year coming up”. Where apparently every Asian was gonna buy crypto because they were celebrating the holiday.

  • There was also the “Wall Street Bonuses” where all the wealthy traders on wall street would get their huge bonuses and put it all into crypto (LOL).

That’s when all coins dropped 80 – 99%.

Good sources for learning

Ledgerstatus on twitch – Trading.