Metamask

Metamask is known to everyone as an extension for the Chrome browser, with which it is easy to send transactions on the Ethereum network, setting the Gas limit and Gas price in any volume at your discretion. It is also known as Metamask wallet, plugin, etc., supporting the ERC20 standard. This means that you can send and receive not only ether, but also Ethereum smart contract tokens (for example, Ins, Bankex, WePower, Republic Protocol).

We will tell you how to install, how to use and how to send/receive transactions using Metamask in our article.

Installing the Metamask extension

You can install Metamask for browsers:

Chrome;
Firefox;
Opera;
Brave.

Unfortunately, there are no official extensions for Yandex browser yet.

Brief installation instructions:

Chrome : Chrome web store → Search: Metamask → Install.
Firefox : Firefox Add-ons → Search: Metamask → Add to Firefox.
Opera : Opera add-ons → Search: Metamask → Add to Opera.
Brave : Extension → enable Metamask.

Mist

Mist is a native Ethereum wallet client and has built-in ERC20 support by default. It is more suitable for ordinary users than the other official wallet - Geth.

The latest versions are on the official Ethereum Github. Installation will require downloading the entire blockchain, which is approximately 60 GB, so be sure to install the wallet on a disk with enough space. Synchronization will take a long time. It is possible to work in the test (pumps out part of the blockchain) and the main Ethereum network.

Due to its heavy weight and long installation time, this is not a popular option for quick work.

Metamask wallet replenishment operations

To replenish your wallet with ether or any other ERC20 tokens, you just need to provide the wallet address to the sender. It can be copied to the clipboard by clicking on Copy Address to clipboard in your account menu.

Your address has been copied, please provide it to the sender. Example:

0xa2FD83811f82d3E7e3DdE9Ab330F926296768aB8

You can track your receipts and wallet status in Etherscan. You can follow the link by clicking on View account in Etherscan in your account menu.

All your operations, movements of ether and other ERC20 tokens will be reflected here.

Disadvantages of tokens

While everything looks good in theory, there is a downside to ERC20. It lies in the downside of the ease of creating coins based on the standard. Ease attracts scammers who launch ICOs, collect money and then disappear. The scheme works because the ICO of the project on ERC20 is seen by many as interesting and promising.

In addition, there is another problem - lost coins inside smart contracts. This occurs when a contract is used that is not intended for transactions with sent tokens. Its developer proposes to solve it using the new ERC-223 standard.

Operations for transferring funds using Metamask using the example of participation in ICO

Let's say you decide to participate in the ArkBlock ICO.

In the Metamask main menu, click the Send button. Once you know the address to which you need to send funds, you need to copy it into the Recipient Address field. Next, in the Amount field, specify the transfer amount (for participation in ArcBlock a personal cap of 3 ETH was set) and click Next.

Specifically for the ArkBlock smart contract there is a limit:

maximum Gas limit 200,000 units;
maximum Gas price 60 Gwei.

These values need to be set in the appropriate fields and click the Submit button.

After this, your transaction will be reflected in the Metamask feed in the SENT tab. By clicking on the transaction number, you will be redirected to Etherscan, where you can track the transaction details and its status (Pending/Success/Fail). Fortunately, in our case it is Success.

The transaction was successful. The transaction fee was $1.02 (0.00126 ETH). The commission depends on the Gas limit and Gas price. Let's figure out how to count them now.

How it works

The operating principle of smart contracts according to the ERC20 standard is quite simple. For example, a user needs to transfer some amount in standard-compliant tokens to another account. From a human perspective, a transfer is initiated, after which electronic money leaves one wallet and appears in another - just like a bank transfer. Technically, everything looks completely different:

the user starts the ERC20 token transfer process;
a directive is sent to the smart contract to change the owner of the specified amount of tokens;
The sender's balance is reduced, and the recipient's balance is replenished by the specified amount.

That is, the parties to the transaction do not interact with each other directly, but with the smart contract.

This leads to simplification of all network operations - there is no need for lengthy reconciliation with databases, you only need to check the transaction’s compliance with the terms of the contract. This simplification made Ethereum's ERC20 technology very popular, and today many altcoins comply with this standard.

Other benefits include standardization of tokens. Previously, projects with unique tokens were created based on the Ethereum blockchain, and this created a big problem for exchanges and other platforms and applications that were going to interact with the new coins. Various mechanisms had to be created to ensure compatibility. This made the process very complex and time-consuming, since it was necessary to create new software “layers” to interact with the newly created tokens. ERC20 tokens solved this problem.

Explanatory video about the standard:

What is Gas limit and Gas price

Gas limit and Gas price are, in simple terms, the fuel that the miner spent to pack your transaction into a block. Limit is the volume of fuel, Gas is its price. And if the volume of fuel is limited, the price at which the commission is calculated is not limited. Unused fuel is returned to the sender. For example, in our case, only 21,000 gas was used out of the established limit of 200,000 gas.

The formula for calculating the commission on ether is simple:

Gas limit x Gas price x 0.000000001

That is, for our case:

maximum commission: 200,000 gas x 60 gwei x 0.000000001 = 0.012 ETH;
actual commission: 21,000 gas x 60 gwei x 0.000000001 = 0.00126 ETH.

Thus, the transfer fee does not depend on the transfer amount, but depends on the current load on the network. When the network is not loaded, you can get by with 20,000 gas at a price of 4 gwei.

Tokens on Ethereum

A lot has been said above about tokens. What is this in relation to ether and why are they needed?

Ethereum is not just a cryptocurrency, but an environment, an ecosystem. Each of its users has the right to use the blockchain provided by Ether to create their own applications and projects using smart contracts. This system can be described in a simplified way by comparing the airwaves with the Internet, and distributed applications (dApps) in it with websites. Moreover, the sites belong not to one owner, but to many - those who purchased the “site” tokens during the ICO process in exchange for ETH coins. That is, a token is the currency of a specific project that circulates on the Ether blockchain.

There are two types of tokens:

Interior. They act as a currency in dApps, an example of such a cryptocurrency is Sia Coin.
Promotional. These are, for example, DAO tokens: they play the role of shares and give the owner the right to vote for the provision of funding for some project in the DAO, by analogy with “offline” joint-stock companies, where the weight of the shareholder’s vote depends on the number of shares in his hands.

The question arises: what are separate tokens for? Isn’t it easier to use the usual ETH to carry out operations?

A comparison can be made with ordinary life, where tokens are also often used. A good example is the subway, where you need to purchase a token to get into it. A similar principle is used, for example, for allowing citizens to enter amusement parks, making in-game purchases, implementing coupon services, etc. The metro is a dApp, the money paid for the token is ETH coins, and the token received in exchange has the right to enter the metro territory is a token.

Metamask and EtherDelta

We wrote about the EtherDelta exchange in our previous article. One of the most common problems when using EtherDelta is account management. The first thing you need to know about EtherDelta is that it has its own checking account. Sometimes this is the same as your current Metamask account, but not always! EtherDelta also allows users to not use Metamask at all, which means you trust the site with your private keys.

The current account menu is always available in the top right corner of EtherDelta.

You will notice that the current account says “No Private Key”. When you click on the menu, you can see a similar message next to each account. Each of these messages has a specific nature that is important to understand.

In this example, the account menu displays all three possible account types:

no private key;
private key;
Metamask.

Let's look at everything one by one.

The Metamask account is the one that is currently unlocked using this service. This is usually the account the user wants to use! If you need to use a different Metamask account, you need to open your wallet and select a different account.

No private key

An account "No private key" means it was previously associated with an Ethereum browser such as Metamask. EtherDelta does not know where this account is. All it knows is what the user had before. Therefore, EtherDelta allows you to view the balance and details of this account without even logging into it using Metamask.

Private key

An account labeled "Private Key" means that EtherDelta has a private key for that account. This is not a Metamask account and is not backed by a seed phrase.

It was likely created when the user selected the New Account option from the EtherDelta menu. At the same time, the following information was displayed on the screen:

When this message appears on your screen, you must back up this private key, otherwise access to this account and all its contents will be lost if your computer crashes or your hard drive fails. Only the user himself is responsible for this. If he does not do this, then Metamask or EtherDelta support will not be able to help.

ERC 20 standard

To begin with, it is necessary to give a general concept of a “standard” in relation to software development, including cryptocurrencies. A standard is a certain set of functions and requirements that developers must follow and use in order for their product to be compatible with projects using this standard.

So, ERC20 – what is it and how does it work? The standard formalizes the requirements for the operation of tokens created on the Ethereum cryptocurrency blockchain.

Important: this standard describes the rules for the operation of created tokens. The ERC20 code is open, any developer can get the source code on the official project page on GitHub and create their own ERC20-compatible coins.

The goal of creating a formalized standard was to simplify transactions between ETH wallets, smart contracts and exchanges. Thus, it is easy for a new coin on ERC20 to enter the exchange, since the protocol for working with it is known, and there are no obstacles to exchange listing.

The procedure for offline transfers

To increase and improve security, we recommend using offline transfers.

In this option, you will need another PC that does not have an Internet connection.

For offline transfer, follow the following instructions:

First step. We get the established cost and the price for GAS. We take a working PC connected to the Internet and enter the official portal of the MyEtherWallet wallet.

We indicate on the site the address of your wallet from which the operation and transaction will be carried out.

Attention! Be sure to indicate the address from which we will send funds, and not the recipient’s address.

Second step. Fill in the working information for the transaction parameters. Now let's move on to an offline PC.

Open the MyEtherWallet portal again, go to the page tab with the “Offline transactions” block. Here you need to display some information:

The exact address of the token recipient.
The amount intended for transfer.
Enter a limit

If we carry out a standard operation, then the gas limit does not need to be increased.

If an exceeded gas limit is indicated, after completing the transaction, the excess will be returned to the account.

Next, we again continue to work on a standalone PC.

Now we will need to indicate the method for unlocking the crypto wallet, after which we will be able to create a transaction.

Next, we will have two windows “ Ready transaction ”, as well as an auxiliary block - “ Signed transaction ”.

Third step. Executing the transaction. We now buffer the “Signed Transaction” to our desktop online PC.

Copying can be done using a regular flash drive. Please note that on an online device, under no circumstances will we be able to change the parameters of the data for the generated transaction.

It is recommended that the user check all transaction information in advance.

After checking the information, activate the “Send transaction” button.

This is the most effective, reliable and safe option that is not available to hackers. Unfortunately, most owners of crypto wallets ignore this option due to the fact that this procedure takes a lot of time and effort. But some, having learned from bitter experience, still use offline transfers in the future to conduct secure transactions.

Mnemonic phrase

1. The window will show a set of 12 random words that you need to copy and write down.

2. Next, you need to click on the words in order, as they were shown on the previous screen.

3. That’s it, the crypto wallet is open, you can move on to an overview of its capabilities.

Exchange procedure in the ERC20 service

According to the general policy of the site, wallet ERC20 is positioned as a platform for storing tokens. However, you can instantly exchange ETH for BTC or REP.

Bity is used as a working platform.

This option is suitable mainly for those who do not like to use crypto exchanges and crypto exchangers.

In this case, when conducting a transaction, we recommend checking the current Ethereum rate.

In a negative light, an unfavorable exchange rate can then “hit hard” on your finances.

Trust

Trust is an officially “approved” Ethereum mobile wallet capable of supporting almost all ERC20 tokens. This application is available for Android and iOS. It is convenient and easy to use if security is not a big concern.

In it you can create a new wallet or import the seed and address of the old one. Security is determined by the safety of your phone, nothing is transferred to the server. However, everyone is waiting for further improvements related to security.

Inside the wallet, you can immediately purchase coins from several exchanges.