- Have you been wondering how you can keep your crypto wallet secure while minting NFTs?
- Are you planning to stake a coin on a platform that is not audited or Doxxed?
Today, we introduce you to a new technique called “Crypto burner wallet”.
Thanks to the recent NFT hype and scams on the Solana platform that has made burner wallets popular.
What Is a Burner Wallet?
A burner wallet is separate (temporary) from your main wallet (Vault), which is mostly used for minting NFTs or interacting with a dApp that is not audited.
You create a burner wallet just like any other wallet but for a specific purpose such as minting NFTs or interacting with an unaudited project. By auditing, I mean the codes of that project, which has not been verified by a security firm yet.
A burner wallet could be a hot or cold wallet where you keep only a minimal amount to pay the gas fees for minting or interacting with any smart contract.
Why Do You Need a Burner Wallet?
You can use a burner wallet in two cases.
In the case of NFTs:
Plenty of new NFT projects are being launched every day. Most of these projects do not have code audits of their minting process. In such cases, any hacker can write a code giving them access to your crypto wallet while minting an NFT. It can further lead to draining your current NFTs and crypto-assets. By using a burner wallet, you are mitigating such risks.
In the case of crypto assets:
Recently, a new NFT marketplace called X2Y2 was launched that offers a spectacular return on staking (close to 6000%). Although the project has good fundamentals, the codes of the project have not been audited. A large number of people are already flocking to grab the opportunity to stake X2Y2 token for their mouth-watering staking return. Since most of them are using their permanent wallets, they are risking their every investment.
One way to mitigate these risks is by using a burner wallet. In a worst-case scenario, If this project ends up doing a rug-pull, only the assets you hold in your burner wallet will be at risk.
These are some of the scenarios where you can use a burner wallet (temporary wallet) to safeguard your crypto and NFT investments.
Remember, using a burner wallet might not be easy for the first time but when has privacy and security been convenient. Once you get accustomed to using a burner crypto wallet, you will not only level up your security/privacy but also your crypto game.
What Are the Advantages of Using Burner Wallet?
I can count many but these are some of the major ones you should know:
- Burner wallets that are also hot wallets (ex: Metamask without Ledger hardware wallet) help in the faster minting of NFTs.
- Burner wallets can be used on mobile phones, which makes them easier to work.
At this moment, unfortunately, not a lot of mobile wallets like Metamask or Phantom work with a hardware wallet.
If you are wondering what a hot or cold wallet is, here is your answer:
- Hot wallets are always connected to the internet.
- Cold wallets are not always connected to the internet. Usually, you need the hardware wallet (physical click) to complete transactions. Thus, making your crypto assets or NFTs secure.
It is a good time to brush up on your basics of different “Types of crypto wallets”.
Dos and Don’ts of a Burner Wallet
Like every other wallet, burner wallets also come with a list of dos and don’ts. Here are some of them:
- Always remember your burner wallet is temporary and should not be used with or as your permanent wallet address.
- It is a good idea to continue shuffling your burner wallet once in a while for maximum security.
- If you are not into minting NFTs, you can always use a hardware wallet along with your burner wallet.
- You can set an ENS address for your burner wallet but it is not advisable since the idea is to change your burner wallet after a few interactions with a smart contract or regularly.
- Burner wallet can also be used when sending or receiving one-off payments to avoid exposing your main wallet address. Note that any smart user could still follow the breadcrumbs to find your main wallet address.
Best Burner Wallets
Here are some of the best burner wallets for different blockchains:
- Metamask wallet – Ethereum and other Layer 2 solutions
- Rainbow – Ethereum
- Phantom wallet: Solana
- Terra station – Luna
- Keplr Wallet – Atom ecosystem
Note: A lot of users are not aware that you can sync your Metamask desktop extension with Metamask mobile app, which also has an in-built browser feature. The app makes it easy for you to mint, stake, or interact with any other DApp.
If you have any other questions about burner wallets or want to share your experience of using one, let me know in the comment section below.
Harsh Agrawal is the Crypto exchange and bots expert for CoinSutra. He founded CoinSutra in 2016, and one of the industry’s most regarded professional blogger in the fin-tech space.
An award-winning blogger with a track record of 10+ years. He has a background in both finance and technology and holds professional qualifications in Information technology.
An international speaker and author who loves blockchain and crypto world.
After discovering about decentralized finance and with his background of Information technology, he made his mission to help others learn and get started with it via CoinSutra.
Join us via email and social channels to get the latest updates straight to your inbox.