A cryptocurrency burner wallet is basically a wallet that is temporary used for transactions you don’t have full confidence on.
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.
Burner wallet use cases
You can use a crypto burner wallet in two cases…
For 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 the 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 permanent wallets, they may be risking their every cryptocurrency investment.
For 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 this 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.
Best burner wallets
Here are some of the best cryptocurrency burner wallets for different blockchains:
- Metamask wallet – Ethereum and other Layers
- Rainbow – Ethereum
- Phantom wallet – Solana
- Terra station – Luna
- Keplr Wallet – Atom ecosystem
Burner wallet Dos & Don’ts
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.
Frequently Asked Questions
Remember, using a burner wallet might not be easy for a first timer, but it will assure that you have privacy and security.
Once you get accustomed to using a burner wallet, you will not only level up your security/privacy, but also your crypto business.
Do not forget that any smart user could still follow the breadcrumbs to find your main wallet address, so be very careful!