How to stay Safe on the Blockchain in 2023
When discussing anything related to Web3 many will question the safety and or legitimacy of it. Whilst a lot of advancements for technology and entertainment are created, it is noted that time after time people and organizations are out to harm people and their wallets.
NFTs and Crypto pump and dumps were a common thing on a mass scale in 2021 and 2022 where individuals were promised huge gains and utility by project promoters. As a result of many people’s naivety, a lot of money has been lost.
A recent report from ImmuneFi has noted that a staggering $3.9 billion was lost in Crypto related incidents last year, a number which increased from the year before that. To be expected due to more people onboarding onto the blockchain, but still alarming nonetheless.
Popular blockchains like Binance and Ethereum were recorded to be at the forefront of these attacks which indicates hundreds of thousands and even millions of people are at risk of losing their assets.
If you are somewhat of a “newbie” to the blockchain it is important you know the correct actions to take to ensure you are safe from malicious attacks. After all, with everything being decentralized by nature, there are no authorities or bodies who can retrieve your lost funds.
The first way anyone can remain safe on the blockchain is through purchasing a hardware wallet. These devices offer users a more safe and secure way to store their crypto rather than through their exchange wallets associated with exchanges like Binance and Coinbase.
Whilst exchanges do generally have security infrastructure in place to protect their customers, we have seen time and time again hackers weaving their way in and compromising people’s funds and assets.
Furthermore, exchanges are not financially stable as we have seen with the collapse of FTX. Billions in crypto were lost and no one has been able to retrieve their lost funds. This is where Hardware Wallets come in.
You can purchase crypto either directly through wallets or transfer them from exchanges. What makes them so safe is the fact you create a 24 worded passcode of very random words. There are technical factors involved but to keep it comprehensive see a hardware wallet as a crypto safe for your funds.
We recommend going for a Ledger Wallet, they have different products available. Retailers such as Amazon stock Ledger Hardware making them a well known name within Web3 for security.
Buy from trusted exchanges & marketplaces
Our next tip for blockchain safety is buying your crypto and/or NFTs from well trusted exchanges. As the space has gained mainstream traction many fraudulent sites are set up to take people’s money leaving them without their desired asset.
We recommend purchasing crypto either directly through your hardware wallet or on Binance and Coinbase. Gemini is another trustworthy crypto exchange, restrictions on their services depend on your location so be sure to check it out before signing up.
For NFTs this will depend on the blockchain and project. The notable ones are:
- Magic Eden (Solana)
- Binance NFT Marketplace (BNB)
- OpenSea.io (Ethereum)
- Rarible (Ethereum, Solana & Tazos)
If you are playing a game such as Blankos Block Party or The Sandbox for example that have NFTs integrated into their game, be sure to purchase/sell them on their designated in-game marketplace.
One last thing to note when dealing with exchanges and marketplaces is to be sure that the URL you click on is a legit one. Scammers can easily set up fake URLs for these sites and cause people to lose their money. If you are not too sure on the URL just search it yourself in your browser. You can never be too sure when dealing with the blockchain.
Keep login details safe & private!
Whilst this seems like common sense you would be surprised at how much crypto is lost from people forgetting their passwords. Lifestyle magazine ‘HypeBeast’ reported way back in 2021 that $140 billion was lost due to users not keeping passwords at hand. We can imagine in 2023 this figure may grow.
Always make a physical note of your details. Furthermore, if you are familiar with hardware wallets you will be aware of the random 24 word password. Forgetting this will prove detrimental as there is literally no way to recover this if lost/forgotten.
Non-custodial wallets such as Metamask also operate with ‘Secret Recovery Phrases’. Made of 12 random words, this passcode is a master password of sorts. To change details on your account for Metamask you will need to have this at hand.
Don’t invest in things you do not understand!
You would again be surprised at how many people invest in things they do not understand. ‘Fomo’ is a real thing, especially within Web3 as outsiders look in and see people making fortunes, they want a piece of the pie, and rightly so!
It’s best to research the blockchain and the different assets available, and how to acquire them. It can be quite technical and with gas fees present on blockchains like Ethereum you will incur extra charges for transactions.
If you are skeptical on a new project, YouTube and Twitter is usually a good place to research. Checking out Crypto/Web3 specific influencers takes on the projects can be beneficial but always go with your gut on whether you believe a project has value. There are fundamentals to a project such as its utility and technology driving it.
Projects on Twitter usually have tell-tale signs of foul play and illegitimacy through follower counts and engagement rates. If for example a project has 100k followers and only averages around a hundred or so likes on most posts, you may want to be wary.
One thing we can say is to not to listen to standard influencers, a prominent example is the Paul brothers who have been accused many times now of foul play and even having legal action in the past against them when concerning crypto related promotions.
You’re in luck if you are new to all this Web3 fiasco. Both Binance review and Coinbase offer educational resources on their sites.
They’re simple to follow as you read through the content and then answer questions on your learning. The best part is you can earn crypto & NFTs for completing tasks!
We hope you enjoyed this guide. Being safe on the blockchain list is vital and it’s best practice to always understand these technologies thoroughly. Why not learn about Web3 with your friends and family in 2023, who knows you could make it big if you play your cards right!