Blockchain technology has certainly opened many doors to new innovations, facilitating all cryptocurrencies, NFTs and DeFi smart contracts. The DeFi (decentralized finance) space in particular has lately been rather exciting lately, to say the least. With its ability to support trading, lending and investing in crypto assets, as well as to facilitate stablecoin fund transfers. The fast-evolving ecosystem, functioning without intermediaries such as banks, is proving to be a reliable alternative, if still somewhat vulnerable due to access to high leverage, liquidity mismatches, built-in interconnectedness and a certain lack of shock-absorbing capacity. And, last but definitely not least, the vulnerability to outright scams.
But before we go into the various blockchain-related scam possibilities and how you can defend yourself against them, let’s go over the most common online scams:
There is, unfortunately, a surprisingly high amount of imposter websites which closely resemble official, valid company websites. Whether you visited one accidentally or have been sent a link to one by other means, you can easily check if the website is compromised. Firstly, take a look if there is a small icon near the URL bar and whether the “https” is in the address. Also, take a closer look at the URL address, where attackers switch letters with numbers, such as ‘o’ and ‘0’, to create confusion and URL lookalikes. Always double check.
Fake mobile apps
Another way scammers trick people is by creating apps on the Google Play and Apple App store. Whichever app you download should have real reviews, no obvious misspellings in copy or name, correct branding, color and logo. If you find anything out of the ordinary, take a note and reconsider your download.
Fake social media accounts
Fake accounts are everywhere in the Social Media space, so here make sure that the people you are following are real and not simply bots. Furthermore, trust offers from Twitter, Facebook or Instagram with a grain of salt and try to proof-check the account’s legitimacy before purchase.
Ever received a scam email? That’s a rhetorical question. The most important thing you should do when you receive a suspicious-looking email is to first proove its authenticity before clicking on any of the links in it. Take a look at the logo, branding and misspellings, as well as whether the email address is connected to the particular company. Most commonly, scammers would announce a positive message to get you excited, such as an upcoming IDO, new premium-free plan, loyalty points, special offers tailored just for you, etc. Don’t fall victim to these fake emails and website offers. Take time and review the source diligently.
How secure is blockchain really?
Blockchain is like an open book behind bullet-proof glass. Everyone can look but cannot touch. As an open code, anyone can find and see what dApps you recently used, transfers you made and how much crypto you hold. So, if you want to keep your finances personal, try to utilize the full capabilities of Web 3.0 privacy-enhancing smart contracts and take back control of your data. In other words, use BlockWallet, the ultimate browser extension wallet for full financial privacy. More on that later. For everyone else wishing to hide their crypto anonymity up to an extent, there are privacy coins.
Privacy coins vs. Bitcoin
All coins run on the blockchain – a digital decentralized ledger – and are validated by a network of anonymous users. So, in essence, privacy coins and Bitcoin are pretty much the same, except for the extra anonymity features that privacy coins have. Take, for example, the largest privacy coin by capitalization, Monero (XMR). The ability to use a one-time stealth address, as well as a ringCT, which hides the amount sent in the transaction, allows for total anonymity of transfers. In Bitcoin’s case, all of the transactions ever made by any address remain on the network and can be viewed anytime by anyone using a simple web browser.
What about crypto liquidity pools?
A lot of cryptocurrency trading is a peer-to-peer transaction. However, some exchanges use liquidity pools. This is an AMM (automated market maker) approach, which could be thought of as peer-to-contract. Crypto liquidity pools are essentially the backbone of decentralized exchanges (DEXes), where portfolios of crypto tokens get locked in smart contracts on the blockchain. Investors, or in this case “liquidity providers”, add value to the pool by adding tokens to it and in return receive interest in the form of trading fees percentages from other people within the pool. This is referred to as liquidity mining.
The acceptance and proliferation of liquidity pools has helped the overall blockchain and crypto ecosystems grow exponentially. There are obvious advantages, such as zero waiting time when purchasing crypto, even when your crypto order is not matched. Another positive is the ability to facilitate the best liquidity pools according to the desired requirements, using smart contract technology. All in all, liquidity pools are considered one of the safest investment options, but even they could be subject to bugs, failures, hacks or exploits, sometimes resulting in irreversible loss of funds.
What makes BlockWallet one of the easiest privacy and security solutions?
As a privacy-focused, non-custodial browser extension wallet, BlockWallet lets you store, send and receive crypto effortlessly. The dApp provides you with a set of advanced privacy tools wrapped in a familiar crypto-wallet user experience.
When using BlockWallet to make transactions or interact with other blockchain apps, your requests are sent through BlockWallet Privacy Proxies by default. This way you are automatically concealing your IP address and other private metadata that may be used to identify you.
BlockWallet’s Privacy Pools is another extremely useful feature. Powered by zk-SNARKs technology it enables you to deposit and mix funds in a smart contract. This way you can transfer funds without links to your history and identity on the blockchain. Basically, you become untraceable. Download BlockWallet and try it out!