Evan SelemaniAlors que le bitcoin is increasingly integrating into decentralized finance, many people are looking to use BTC in certain applications. To use le bitcoin in DeFi interests more and more people. It is indeed an opportunity to use your BTC in decentralized protocols. To do this, the first thing to know is how to store bitcoin on a decentralized wallet such as Metamask.
It is indeed the most used wallet (and the oldest as well) when it comes to interacting with decentralized applications. However, it is entirely possible to use other decentralized wallets to follow this tutorial.
Here we will see how to store bitcoin on Metamask, so that you can use your bitcoins in decentralized finance, previously intended only for altcoins.
The MetaMask wallet: What exactly is it?
Regardless of the type of financial asset one chooses to store (stocks, bonds, mutual funds, ETFs, etc.), every investor needs a safe place to keep their money. It can be a safe, vault, broker, vault, piggy bank or any other device. The same goes for cryptocurrencies.
However, to keep cryptocurrencies, one must have a special tool, which allows users tohave full control over their funds. Dappradar is one of its tools.
It belongs to the category of “hot wallet” or “hot wallet” in the language of Molière. This type of wallet comes in the form of an application or browser accessible on a computer, tablet or smartphone. It allows to store cryptocurrencies and private keys, necessary for signing transactions.
MetaMask is available on the mobile application (Android and IOS) and on the browser extension (Chrome, Firefox, Edge). It allowsinteract with EMV-compatible blockchains (Ethereum Machin Virtual).
Created in 2016, it quickly gained traction and became the most downloaded wallet to date. Today, more than 30 million users worldwide use it to store and trade tokens. Additionally, it is possible to access non-fungible tokens (NFTs) and interact with decentralized finance applications.
Is MetaMask for Ethereum only?
Many people think it is appropriate to use Metamask only for ERC-20 tokens. However, Metamask is interoperable with all blockchains that are compatible with the Ethereum Virtual Machine (EVM).
Besides Ethereum, Metamask manages many other networks, including Fantom, Polygon, Binance Smart Chain, Avalanche, Cronus, Arbitrum, Harmony, etc. We would like to point out that MetaMask does not currently manage networks such as Solana, Algorand, Cosmos or Tron.
Therefore, there is no direct way to hold cryptocurrencies issued by these blockchains on MetaMask. However, it is possible to store or exchange these types of cryptocurrencies using an alternative method.
This is the method we want to show you here.
How to store Bitcoin on MetaMask?
As previously stated, MetaMask is linked to the Ethereum blockchain and custom networks. Therefore, it is not possible to send or store bitcoins directly using this wallet.
Transactions on the Bitcoin blockchain can only be sent to Bitcoin addresses. The same goes for all other blockchains. Except for networks interoperable using bridges, Of course, each address can only accommodate compatible token standards.
👋 So, for a Bitcoin to be sent to the Ethereum network, it must be “wrapped” and locked in one place. In other words, block it on the Ethereum blockchain, in exchange for a new token that represents this locked Bitcoin in a 1:1 ratio.
That's what we call Wrapped BTC (wBTC). Indeed, this Bitcoin has the same characteristic as an ERC-20 token, and can be used across the Ethereum ecosystem. This also means that 1wBTC = 1 BTC in terms of value.
In fact, for a bitcoin to be stored on Metamask, it must be in the form of Wrapped BTC (WBTC). This facilitates interaction between different blockchains. Which adds the value and stability of bitcoin to the decentralized application ecosystem based on the Ethereum blockchain.
–> Read the article on Wrapped BTC (wBTC)
How to get wrapped BTC (wBTC)?
As you can see, sending bitcoins directly through MetaMask is difficult due to the lack of interoperability between the Bitcoin network and the Ethereum blockchain. It is for this reason that Wrapped BTC (wBTC) has been proposed as a way to connect the two infrastructures.
In fact, in most cases, to wrap Bitcoin you need to send BTC to receive WBTC in return. As a reminder, the wBTC, is an ERC-20 token attached to the value of BTC. However, this transaction requires a custodian whose role is to lock this amount in BTC against the number of tokens wrapped. The latter can be a decentralized autonomous organization (DAO) using a smart contract.
However, you can get your hands on WBTC in no time using one many exchange platforms who are doing it now. It is indeed a simple way to obtain WBTC.
The other method is to obtain it directly from a DEX in case you already have tokens on your metamask wallet.
👉 How to buy wBTC on an exchange?
The majority of exchanges will allow you to purchase WBTC quickly and easily. Take the example of the market leader, Binance, To illustrate this point:
- Click on "Classic” in the Binance Trade section.
- Find the BTC/WBTC pair
- Specify the quantity of WBTC you wish to acquire,
- Confirm your purchase by clicking on the Buy WBTC button.
The final step after acquiring wBTC is to deposit them to your MetaMask wallet address directly.
👉 How to exchange tokens for wBTC?
It is also possible if you use and are already familiar with DEXs, to simply obtain WBTC on a platform like Uniswap For example. To do this, you must have tokens in your account in order to be able to exchange it for wbtc.
What are the risks of storing bitcoin on MetaMask?
Now that you know how to store bitcoin on Metamask using the wrapped bitcoin method, you now need to discover the decentralized applications that interest you.
This is indeed why many people use wBTC. The idea and the objective is in fact to make it work on specific protocols. THE bitcoin in DeFi always offers more opportunities and the applications continue to expand.
🤯 However, this is not necessarily recommended if you want to “keep” your bitcoins over the long term in a way that secured. On Metamask, you take the risk of being hacked for example. Indeed, storing your bitcoins on a connected wallet necessarily leads to more vulnerability. You could also interact with a protocol that is unsafe, unaudited, or a scam. You will then take the risk of losing your cryptos (and even your wBTC). You have to be aware of the risk.
Some people simply want to own wBTC that they will keep in their wallets. However, it might be better for holding bitcoin to simply buy some and keep it in a high-security wallet like ledgerEg.
See also:
Note: This is not investment advice. Always do your own research (DYOR). Only invest amounts you are willing to lose. Trading is an activity that involves risks of loss of capital.
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