What is a Cryptocurrency Burner Wallet?

A comprehensive guide on crypto burner wallet, and how you can create or use it to avoid loss of cryptocurrency investments due to scams.

By The 'Staunch

A crypto burner wallet is basically a type of wallet that is temporary used for transactions you don’t trust.

It’s simply a newly created wallet that you use only for the purpose of getting Airdrops and NFT, which you’ll later send to your regular (Vault) wallet.

This way you wouldn’t connect your wallet to an unaudited site, in case it turns out to be a scam that tries to steal your funds.

Thanks to the recent Airdrop, NFT hype and scams on the Solana platform that has made burner wallets popular. 

A burner wallet could be a hot or cold wallet, where you keep only gas fees for minting and interacting with any smart contracts.

Crypto burner wallet use cases

You can use a cryptocurrency burner wallet in two cases, and they are:

1. Crypto assets

Recently, a new NFT marketplace (called X2Y2) that offers a spectacular return on staking (close to 6000%) was launched.

Although the project has good fundamentals, the codes of this NFT project have not been audited yet.

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 main vault wallets, they may be risking all their crypto investment.

2. Non-Fungible Tokens

Plenty of new NFT projects are being launched daily, and most of them 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 currently invested NFTs and crypto-assets, but using a burner wallet, you’ll be mitigating such risks.

One way to mitigate these risks is by using a burner wallet.

In a worst-case scenario, if the project ends up doing a rug-pull, all the investments in your vault wallet would be safe.

These are some of the scenarios where you can use a burner wallet (temporary wallet) to safeguard your crypto and NFT investments.

How to create a burner wallet

To make this tutorial very simple and easy to understand, we will show you how to create a burner wallet on MetaMask web 3.0 wallet.

Here are the steps you need to follow to create a MetaMask burner wallet:

  1. Create and log into your MetaMask account
  2. Click on your wallet aaccount name
  3. Click on ‘Add Account’ option
  4. Enter ‘Burner Wallet’ as the account name
  5. Click on the ‘Create’ button.

Once the MetaMask wallet account is created successfully, you can then use it temporalily for crypto transactions that you’re not confident on.

Best burner wallets

Here are some of the best recommended hot wallet for those looking for how to create a burner wallet for crypto on different blockchains:

  • Metamask wallet – Ethereum and other Layers
  • Trust Wallet – Best multi-chain hot wallet
  • Rainbow – Ethereum
  • Phantom wallet – Solana
  • Terra station – Luna
  • Keplr Wallet – Atom ecosystem

Tips for using burner wallets

Like every other crypto wallet, these burner wallets also come with a list of dos and don’ts as follows:

  • 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.

Is burner wallet the same as burning wallet?

No. They’re not the same, because burner wallet crypto has been created to avoid scams, while burning wallets are just physically created and sold wallets with some fire magic gimmick.

How to can you make burner wallet?

Creating a burner wallet for crypto transactions is quite the same way you get accounts for your other wallets.

Which hot wallet is best used as burner wallets?

I would recommend using Trust wallet due to its security, but on a second thought, you can also create a wallet account on MetaMask and use it as a cryptocurrency burner wallet.

How do I create a burner wallet on Trust Wallet?

To create a burner wallet on Trust mobile wallet app is simple as just adding a new wallet to your wallet account and naming it ‘Burner Wallet’.

In other words, that’s how to create a burner wallet for temporally crypto transactions on your Trust Wallet app.

Final thoughts

A cryptocurrency burner wallet is an easy way to protect yourself from getting scammed in the space.

However, it’s important to note that it’s still different from a wallet burn address, which is the address you send crypto-coins to when you want to burn them.

Moreover, using a crypto burner wallet might not be easy for a first timer, but it will assure that you have privacy and security.

Don’t forget that smart cryptocurrency users can still follow the breadcrumbs to find your main wallet address, and that’s why VPN is very necessary.

These VPN (Virtual Private Network) services are best used to hide your crypto transaction footprints on the blockchain.

Once you get accustomed to using a burner wallet, you’ll not only level up your security or privacy, but also your cryptocurrency business

About the 'Staunch

Henry is the founder of Crypto Staunch. He studied accounting and finance at Godfrey Okoye University, but became a Cryptopreneur to pursue his interest in learning digital currency and asset investment. Since 2018, Henry Kings has writing about Crypto, DeFi & NFT to help other people get started in the space. His publications has been featured in Binance Square, Digest Africa, Tech Economy, International Business Times, CoinDesk and many other top Crypto media outlets.

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About The 'Staunch

Henry is the founder of Crypto Staunch. He studied accounting and finance at Godfrey Okoye University, but became a Cryptopreneur to pursue his interest in learning digital currency and asset investment. Since 2018, Henry Kings has writing about Crypto, DeFi & NFT to help other people get started in the space. His publications has been featured in Binance Square, Digest Africa, Tech Economy, International Business Times, CoinDesk and many other top Crypto media outlets.