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Is Metamask Tracking Your IP Address?

Beneath the rubble of the FTX collapse, stronger calls for regulation within the web3 industry are growing louder and louder as more companies and projects begin to crumble. Calls for stronger regulations and control have been repeated frequently through the year as more web3 businesses continue to falter under shady business practices and a declining market. 

In an act of compliance, Metamask has already marked a shift in their data collection by stating that they will begin noting IP addresses to every Ethereum transaction run through their node, causing a massive backlash within the web3 community.

New changes to policy

On November 23rd, Consensys - the company behind MetaMask - stated that they would be changing their privacy policy to include the collection of IP addresses with any transaction used through the Infura RPC which is the default RPC for MetaMask users. The IP addresses would be stored along with the wallet address that was used. 

However, Consensys was quick to acknowledge that users who switch their RPCs would not have their IP addresses tracked and stored by MetaMask, which offers some relief to users on one of the most popular crypto wallets available. 

Why it matters

Arguments about privacy on the blockchain have been a heated topic of debate for some time now, well before the 2022 crypto crash. Many have argued that although the blockchain is a publicly held ledger, there is still a need for privacy as people recorded on the blockchain can become easy targets for scams and hacks in the future. 

The debate got even larger during the summer of 2022 when TornadoCash, a crypto mixer that hid wallets, was sanctioned by the United States government in an attempt to reduce the ability of cryptocurrencies to fund terrorism.

Now, we are seeing a new issue begin to arise, which is too much transparency. For many, attaching IP addresses to every transaction done through MetaMask is crossing a dangerous line that can put many people at risk and is safeguarded by the same mechanisms that web3 is meant to disrupt.  

Centralized servers that store user data have become a focal point for advocates of web3 that believe data should not be stored in any single location. Further, these same advocates believe that selling such data as a product is also wrong and something that can be mitigated with web3 because it allows data to be stored in decentralized locations. 

While unlikely, the ability to track someone’s physical location with an IP address is also possible and creates a new layer of danger for people that house large amounts of liquidity in their MetaMask wallets. 

How to change nodes?

Fortunately, changing Ethereum nodes and RPCs is a fairly easy process that only takes a few minutes of time. MetaMask provides an ability to add new networks to their wallets which includes the ability to use different nodes on the Ethereum network that do not interact with Infura’s nodes. 

Moreover, this switch in privacy policy could be a boon for many node NFTs which offer faster transaction speeds as part of their utility. Owning NFTs such as Moonbears or JustCubes allows users the instant ability to change RPC URLs which could cause values for those nodes to go up in the future.