Web3 And Crypto Scams: Believing These 5 Myths About Web3 & Crypto Scams Will Guide You Best 2022

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Welcome back to the second part of our Web3 introduction series. After we went over the basic definitions and concepts of blockchains,web3 and crypto scams, in part 1. we now want to teach you important skills to not get ‘rekt’ (destroyed) in this space. Hence this scams and dangers guide.

If you are new to the world of blockchains, decentralization, and crypto please head over to our Web3 beginner’s guide first. The beginner guide will teach you the general basics and terminology that are needed to understand what this second part will be all about.

“Web3” was coined in 2014 by Gavin Wood, president and founder of the Web3 Foundation, and he predicted then that it was going to be the next version of the internet. At the time, Wood had just developed Ethereum, the cryptocurrency whose prominence and the market size are behind only bitcoin. 

Web3 will be built on the blockchain, a network of multiple servers (peer-to-peer nodes) working independently from different parts of the world. But what is truly enticing about Web3 is its strong financial implications, also tied to cryptocurrency. Proponents of Web3 believe it will remake the way the world works—reshaping organizations, money, value, rights, the internet, and even liberal democracy.

After our explainer on Web3, we set out to have a discussion with a blockchain engineer to help break down Web3 building blocks for our readers. We spoke with Mayowa Tudonu, one of Nigeria’s leading blockchain engineers, and he answered some of our readers’ burning questions on Web3.

Tudou studied computer engineering at the Obafemi Awolowo University and, while still in school, started working with Jumia as a software engineer before joining Interswitch’s Research and Development (R&D) as a blockchain engineer.  After leaving  Interswitch, he joined Buy coins and a host of other Defi companies. 

Tudou is currently building Wallet Cloud, a blockchain wallet-as-a-service platform, which provides an API that allows businesses to use blockchain wallets.

Disclaimer: This article is not about finances, but about security measures, you should take when interacting with this technology.

#1 The Easiest Way To Get Rekt In Web3 and Crypto Scams: Wreck Yourself!

New technologies always bring new hurdles and stumbling blocks, especially for beginners. This is true for the Web3 and crypto space, as a lot is still rather new and uncharted. 

Good guides and safety measures are still rare to come by. This is why we gathered our knowledge of the most common traps and scams that you will come across eventually when interacting with crypto and web3 applications.

1. Losing Access

For every blockchain like Ethereum or Binance Smart Chain, different wallets exist that allow you to store your tokens and execute your transactions. 

Web3 and Crypto Scams: Losing Access

In most cases, you don’t have to give any information about yourself to create such a wallet. By default it is simply is an anonymous address that allows you to send and receive tokens or sign messages.

The wallet is to Web3 what the Web Browser was to Web1. If you are unfamiliar with how wallets work, check out our Guide for rookies.

To protect yourself, always remember: you are entirely responsible for your wallet. There is no customer support, no password recovery, or similar.

When you’re creating your wallet, make sure that you have your seed phrase saved on different SECURED locations, best offline.

Once your wallet is set up in a browser, you can access it through password login and don’t have to use your seed phrase again.

On centralized exchanges, there is at least a chance to get control back over your account, as it is registered to your name and ID. This makes centralized exchanges often the best place for beginners to get some routine handling crypto assets and transactions.

2. Giving Away Your Seed Phrase

NEVER SHARE YOUR SEED PHRASE OR PRIVATE KEY WITH ANYONE.

Giving Away Your Seed Phrase

The only reason you will ever enter your seed phrase is to RECOVER your account if you lost access to it. And you only do this on the wallet software itself. 

On the MetaMask website, or their browser extension for example. Never show anybody your seed phrase and never enter it on any third-party website or tool. Somebody is asking you for your seed phrase? He/she is a scammer 101% of the time.

The same is true for your “private key”. Most wallets allow you to export a private key with which you can re-import an account on a different device. NEVER share this key with anyone.

Everybody that has access to your seed phrase or private key can empty your account. It’s not only like giving them the pin to your credit card – more like giving your ID & phone number so they can empty the entire god damn bank account.

3. Sending A Transaction To The Wrong Address

Sending A Transaction To The Wrong Address

This is a classic in every finance industry: “Oops, I used a 6 instead of an 8”. This error is most of the time not that serious in traditional banking, as you can undo transactions and talk to your bank.

 But if this happens to a blockchain transaction… yes you guessed right, you wrecked yourself again. On-chain transactions cannot be undone, changed, or manipulated. 

Once you accept the processing of your transaction, it is irreversible. The only way to get it back? The receiver has to pay close attention and be nice enough to send it back to you – so your chances are rather small.

The same can also be said for the amounts that you’re sending. Always review twice if the amount you’ve entered is correct.

You don’t want to fat-finger 

4. Using The Wrong Protocol Or Network For A Transaction

Using The Wrong Protocol Or Network For A Transaction

For the sake of keeping things simple, we will combine a bunch of mistakes.

Just keep in mind, that different blockchains cannot simply interact with each other. Even if they are based on the same platform like the Binance Chain and Binance Smart Chain.

The same can be true for different networks or sidechains that supplement a blockchain. They might be based on the main blockchain but often require you to convert (bridge) your transaction.

Always make sure that you are sending your tokens to a wallet that also accepts this kind of token. Or otherwise, they will be lost.

When in doubt ASK ASK ASK. Nobody will be mad at you for being paranoid and double-checking.

5. Malicious Airdrops

Malicious Airdrops

This technique is still pretty young and many people are not aware of it yet. One downside of your wallets being visible and addressable is, that everybody can send you tokens or NFTs to your wallet. Generally, this is not a big problem, because you can simply choose to ignore these tokens…

…However, there are ways for scammers to send you tokens, that will allow them to execute transactions with your account once you interact with their tokens. You could compare it to a trojan that lets hackers access your computer once you open that malicious file and interact with it.

Bad news: You cannot do a single thing to block the incoming transactions from scam-tokens or scam-NFTs.

Good news: As long as you don’t directly interact with them, they can’t do anything to your account.

Similar to the trojan being in your e-mail. You can’t stop them from sending it, but you are not forced to interact with the trojan.

Whenever you are searching Twitter for information be aware that many scams buy fake accounts with thousands of followers to look real. Don’t get blinded by superficial vanity metrics.

There is another, similar attack, called a Dusting attack, which hackers can use to track your wallet activity.

for more details please visit our website 


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