Web3, Wallets

The Essential Wallet Guide, Part 4: Browser Extensions

One of the most powerful use cases for Ethereum technology is the introduction of DApps, which are decentralized applications built on smart contract technology that offer services without the need for third parties or centralized servers. DApps are the reason Ethereum has seen increased adoption and exposure in mainstream media in recent years – after all, DeFi platforms and NFT marketplaces are blockchain-based applications. Browser extension wallets are built specifically for easy DApp interaction on web3, but they may not be the most secure solution for holding larger quantities of crypto long term.

What's Web3?

The term web3 refers to the next stage of internet evolution. The beginnings of the internet –  web1 – mostly consisted of static web page designs with no advertisements. It’s the internet in its infancy, mostly filled with personal web pages.

The vast majority of internet as we know it is what’s called web2. All social media sites, websites with logins, podcasts, or any content-focused sites are web2. It hosts advertising as well, setting it apart from the previous generation. Web2 relies heavily on data of all types, including user data, traffic data, and advertising data. This data helps specialize the services for the user, but it also helps monetize them. It enables services to keep an eye on what’s popular and personal for all their users, and they often sell that information to third parties.

Web3 is the future of web interaction, where the user is the focus. It’s decentralized, so personal data remains personal. For example, most banks as they exist now hold all of your personal information and finances. They know everything about your spending habits, debt, where you live, how old you are, what you had for breakfast, the list goes on and on. If something doesn’t seem right, they’ll be quick to shut down your ability to use your own money. In a web3 financial structure, you’re the only one who has access to your finances. No one can throw last minute fines at you or lock you out of your account, you’re the only one in control.

Web3 was largely just a fantasy until blockchain technologies arrived on the scene, making way for true privacy and power over one’s identity when it comes to web interactions. The Ethereum blockchain powers web3 development, and browser wallets act as your vehicle to navigate the waters of decentralized finance.  

The Extension or CX Wallet

DApps on web3 range widely, from games and gambling apps, to decentralized exchanges and complex DeFi instruments – just take a look at a DApp ranker like  DappRadar to see the variety. These applications are web-based and can heavily depend on time-sensitive actions and the efficient use of smart contracts. Browser-based extension wallets were created specifically to facilitate interaction with these web3 sites.

Well-known extension wallets include MetaMask and Dapper. As an alternative, some browsers like Brave and Opera offer Web3 wallets built right into their browser infrastructure. However, native wallets like these can monopolize their audience, making it difficult to use other browser extensions because of conflicts with permissions. The user is then limited to the functionality of that specific wallet’s features.

Browser extension wallets are critical for mass adoption, as they offer a convenient and easy way to access real use cases directly without the need for additional knowledge. They are the closest we’ve gotten as a community to providing a sense of user identity through a wallet, without the need for KYC or any actual identifying personal information. They’re also forerunners in the adoption of web3, which is helping direct the entire internet to a more decentralized, user-centric landscape.

However, there are some concerns with browser wallet security. Given that an extension wallet is used to interact with multiple DApps every day, this gives scammers and thieves many opportunities to exploit user confusion and smart contract weaknesses. That's why an extension wallet is just one of the tools needed for a safe crypto journey. For best security, larger amounts of crypto should be held in cold storage, like a hardware wallet.

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About Stephen Wooldridge II

Contributor to MEWtopia, dedicated to bringing awareness and education about blockchain technology to the masses. The only way to move forward is by moving together.
  • Los Angeles, CA