Metamask Is Collecting Your IP - What Can You Do?


May 16, 2023


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Something awful is happening in the crypto space. Metamask, one of the largest self-custody wallets in the space, will start collecting its users' IP addresses. While troubling, there are still plenty of options for those who want to keep their online privacy.

The ConsenSys problem: why Metamask will track users' IPs

ConsenSys is a blockchain software technology company founded in early 2015. The company's mission was to create decentralized software for the Ethereum blockchain.

And boy, did they create something meaningful. In 2016 they launched MetaMask — a wallet that allows users to interact with the Ethereum blockchain.

ConsenSys, however, is not without controversy.

In August 2020, ConsenSys acquired Quorum from JPMorgan Chase. This merger caused wariness in the community as the U.S. banking giant was not well regarded. By the end of 2021, ConsenSys raised $200M at a valuation of $3.2B. Shortly after that, in March 2022, ConsenSys raised an extra $450M in a second round.

ConsenSys, despite being an essential company for the Ethereum ecosystem, has been quite criticized.

And what recently happened only made it worse.

ConsenSys' new privacy update

On November 23rd, ConsenSys announced that it had revised its privacy policy agreement. Once users started reading the new deal, they got a big problem. MetaMask would start collecting users' IP addresses and Ethereum wallet addresses during transactions.

ConsenSys could disclose the collected information to its affiliates during business dealings. Likewise, they could also share the information to follow know-your-customer and anti-money laundering requirements dictated by authorities.

And here, chaos ensued.

People started attacking ConsenSys because it was a betrayal of its users.

But not everything is lost. Here, options abound.

How to have privacy on the Ethereum blockchain

In ConsenSys' own words, they will only collect some of the information. Data collection only applies if they use Infura, MetaMask's default remote procedure call (RPC) application.

This means that users have a couple of options to avoid their data collection. On the one hand, individuals can use their own Ethereum node to process their transactions. This, however, is out of the question for the vast majority of casual users.

The second option is to use third-party RPC providers on MetaMask. If so, they will not be subject to the new ConsenSys privacy policy but, instead, to the terms of the new provider.

One remote procedure call (RPC) provider that does not track its users is Alchemy. To do this, you'll need to take several steps. The first big step is to create a free Alchemy account to use an API key. With this, Alchemy will be able to replace your MetaMask endpoint.

After this, you should create an Ethereum API key on Alchemy. The process after this can be a bit tedious, as you must add the custom RPCs manually in MetaMask.

Once you add these RPCs, you must use them every time you use your MetaMask. It is a lengthy process, but it ensures your privacy when interacting on the Ethereum network.

The third option is to switch wallets. You have your keys and can import them to other wallets with which you feel more secure. However, do your research to avoid using an unreliable wallet.

The fourth option is to stick with MetaMask as it is. Suppose you don't care so much about privacy and want to save yourself the effort. In that case, you can continue using MetaMask as if nothing happened. However, you should be aware that you are being watched at any time.

For now, we can see that MetaMask is not 100% unusable. However, it is worrying that one of the largest self-custody wallets is storing such information. This calls into question how decentralized the project is.

We should all enjoy decentralized finance without remorse. The decision is up to you: will you do what you must to enjoy your crypto privately, or will you let someone else have your information? DYOR.