Five common web3 scams and how to avoid them

Transcript

g m g m welcome to web3 Academy a place for businesses entrepreneurs and creators to learn how to use web 3 to build thriving businesses and thriving communities I'm Jaybird and as always I'm coming at you to make sure that you are on the Forefront of web 3 and blockchain technology in today's show I'm focused on how to keep you safe too many people in this space are getting scammed they're getting they're losing their assets they're getting rugged with nft projects and you need to make sure that you have the knowledge of

what you can do to stay safe and it starts with just understanding the most common scams what scammers are doing understanding the way they act will help you ensure that you keep your assets safe and in today's show we have a Community member who joined us to share the five most common scams in the space and exactly what you can do to keep yourself safe so I'm going to run you through that in today's show but before we dive in if you want to make sure that other people stay safe if you want to make sure that as we onboard millions and billions of people to web through that everyone stays safe you can do us a big favor and give us a like on the podcast give us a subscribe a follow

wherever you are listening YouTube Apple Spotify it makes such a difference to us and costs you nothing but it really helps with us boost the algorithm and get this show in front of more people which is going to make such a difference as more people on board into web 3 we make sure that they stay safe so they stay in the space and they don't leave because they had an unfortunate situation which unfortunately many people too many people have had so so before we jump into today's deep dive though just need to take one minute to hear from our sponsors the future of social media is here and that future lives in web 3 on top of lens protocol web 2 social platforms are broken and

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are the future of business and community and that's why we decided to build an unlock learn more at unlock dashprotocol.com welcome back as I mentioned before we are deep dive in today on the five most common scams in web3 and how you can avoid them this article is brought to you by Our Community member marsu Shadow marceous thanks so much for being a leader and making sure that everybody says stay safe in web3 hack Tober if you haven't heard the term that was what the crypto natives were calling or are calling this past month scam Fest October became

hacked over according to Peck Shield October saw exploits reach 760 million dollars now thankfully the true number is much lower than that due to Quick reactions from the BNB chain validators which only allowed the hacker to get away with 110 million rather than the full 560 million originally reported but it's a firm reminder that scams and hacks are still abound in our beloved web 3 sandbox so that's why in today's deep dive Our Community member is sharing his thoughts on the common scams and what you can do to avoid them

now let's be clear if Carl to the Moon hops into your inbox and you think damn I'm finally part of the Bitcoin whale Inner Circle relax take a deep breath and wake up there is no such thing as free money on the internet no matter how Innovative web 3 is if it's too good to be true it is too good to be true sure it's exciting to feel like you've got some Insider information maybe this is your chance to get rich quick but it's important to remember scans are everywhere in web 3. some attempts are obvious with their

misspelled words and jumbled links however some scams are quite sophisticated and difficult to detect which is why we are giving you this deep dive today so if you receive a DM out of nowhere promising you crypto riches or the next best nft project don't reply don't interact with it and don't forget to report or block them on whatever platform you're all on now hopefully there is some new tech coming out and new ux coming out that will help to alleviate our current scams that are happening in the space but until then here are the five most common scams to

watch for number one verified fakes fake accounts so just because somebody seems like they might be an official account on Twitter for example does not mean that they're not a scammer okay some or on YouTube Just because somebody has thousands or hundreds of thousands of subscribers or followers does not mean that they're not a scammer some of the the most common ways that scammers win in this space is by first spending money and what they do is they spend money to get a verified account or to show you that they have a lot of followers to

make themselves seem legit and then what they'll do is they'll buy even they'll buy an account they'll buy YouTube they'll buy a Twitter account from a a reputable person and then they'll rename it and use it for their own purposes which can be very misleading to us so you've really got to be careful with who you trust online do your own research and just because there's accounts verified does not mean that it's legit if you ever get a message from the official Michael Saylor account telling you that for just .01 BTC you send him you're going to receive triple the amount back it's safe

to say it's not Michael Saylor himself if Bitcoin is so valuable and scarce why would anybody freely share their satoshi's if it sounds too good to be true it probably is number two most common scam rug pulls well squid game was an excellent Netflix series it certainly was the crypto World saw its own version play out and it wasn't pretty some Anon devs decided to create a squid squid game squid game game where nft game where users could play to earn squid tokens there were a few profitable players here and there but the majority of the squid game

investors got nothing out of the token boom even though it exploded from .01 to 90 dollars the token price forgive me this was a token game not an nft game that's a yeah that's a nine thousand percent increase but don't ever fall for insane numbers like these this usually happens on small cap tokens and tends to be the result of Market manipulation rather than real trading what happened when each when it reached ninety dollars per token the devs halted trading and rugged the project gone just like that it's certainly not a good feeling when you see your token falling from ninety

dollars to zero while finding out that the ruggers made three three million dollars in profit but it emphasizes the need for doing your own research rather than fomoing into a random project on a personal note here's marsoo's own rug rug full story in November 2021 when BTC was seeing all-time highs and random all coins were pumping harder than ever his brother told him about crypto cars the project promised a lot they had crypto cars crypto planes and submerging features between their games and when he heard that a friend was earning thousands of dollars each month from the two games he

had to try it himself he was minting their tokens by running some daily races the game wasn't fun at all but it was easy easily he was easily making over ten dollars a day without much work a big red flag in hindsight one month in before being able to withdraw what he was hoping was one Heath he found out on their Discord channel that the owners ran away with everything prices began to inflate massively inside the game and one month later the website was taken down insert insert stupid joke sound effect here tldr he wasted a few hundred bucks acquiring crypto card tokens for a as high as 10 cents well today's price sits

around .0005 so I mean a fraction of a cent so be careful if it sounds too good to be true it is too good to be true and also the best thing with you can do with rug pull projects ahead of time is do your own research find out who the creators of the projects are if the creator of the project is Anon if they are not known if they are not freely sharing their identity then I would not invest in that project I would only invest in projects where the creators have docs they've come out and they've said here's who I am here you

can follow me on Twitter because then you can go look them up and you can see would you trust this person are they active online are they do they do they seem like a scam or do they seem like a legit human these are all things that you can do your own research around okay number three most common scam in crypto is Ponzi schemes so if you were around back in 2017 you'll likely know all about bitconnect but if you don't over 3.5 billion was stolen out of investors wallets yes you heard that right 3.5 billion it was probably the biggest and sadly the most successful Ponzi scheme in crypto history the self-proclaimed open source

cryptocurrency guaranteed investors 40 returns but it turned out to be nothing more than a digital Ponzi scheme the U.S Securities and Exchange Commission the SEC said bitconnect operated a textbook Ponzi scheme by paying earlier bit connect investors with money from later investors at the beginning of 2018 admins closed the rewards platform and the bitconnect coin value BCC coin value dropped from 525 to as low as 0.6 as 68 cents so a project like bitconnect offers a guaranteed 40 percent yearly return take a second to think about where that yield is coming

from in saying that it's definitely possible to achieve these term returns with a Sound Investment plan and a lot of work and a experience beyond what most of us have it's just not likely if it's one click and they're guaranteeing you returns of even above 20 which we've all seen in the past year multiple unfortunate circumstances where these returns were promised and a lot of people lost a lot of money so be very careful it's impossible to guarantee such significant returns without it

becoming suspicious and without there being something else going on and I want to be clear I'm not saying that you shouldn't get involved in crypto it's been one of the greatest joys of my life and that's why I've decided to spend my entire life in the space researching crypto on blockchain and nfts but if you are getting involved you need to do so in a smart way and it's just really as simple as doing the extra research and if something is too good to be true it probably is don't get caught up in all the hype of all the people online saying I made million dollars here or I made a hundred thousand dollars here that's sure maybe they did and good for them

kudos to them but that's not that is the extreme minority of people that that will happen to for most of us were better to play it safe and get returns that make sense and that are realistic not these 40 annual returns okay the other common scam in the space is phishing scams and phishing scams is something that's really important to understand because you can definitely keep yourself safe from this if you understand it and one great example is the people hack case so Mike people winklehan Winkleman sorry saw his Twitter account compromised like his official Twitter account and people is

one of the largest nft artists in the space as a result a few of his posts were now pointing to a Discord server already compromised by a hacker the new links LED users to a malicious copycat server that enabled the hacker to steal user assets if they open their wallets or try to perform verification it appears this is what he said it appears our Discord URLs were hacked and now point to a fraudulent Discord do not go into that Discord and do not verify it will drain your wallet he desperately tweeted trying to reduce the ongoing damage in the end over 450 000 worth of funds were stolen through this hack and this

isn't the first time this has happened to a reputable person on Twitter this has happened to zenica it's happened to 40 of Yacht Club so it doesn't matter how big or small a project is official accounts can become compromised unfortunately you know as I just mentioned board apoc Club had three security breaches in the first half of 2022. even projects that have just minted become targets regardless of how successful they are sometimes hackers will even gain access to a whole Discord Channel and use this chance to swap out official links for phishing attack links so that's why it's important to always stay vigilant by checking any and all links you plan to click even if they're

from an official account or a Discord server you frequent the sort of paranoid view on this is to not click on any links that are not from people that you know and trust and even then if you are what my view is is I will click on a link that somebody somebody on Twitter might post a link uh to an article or to something that I want to read now I would never click on a link that promised me outlandish returns or anything like that I would not uh I would not be that stupid but maybe maybe somebody posts an article or they post a link to a doom dashboard um and I want to read about it because

I'm here to learn and stay on top of the tech but here's my simple rule is what I always do is I check the link first if the link is not something that I recognize then I will not click on it so if the link is to you know the Washington post.com forward slash the article well I know that the washingtonpost.com is a reputable organization and I trust them so if they're if it's to a news company that I know and I trust I'm willing to click on that link because as long as I see that it is their their domain their.com domain but let's say it's uh you know

x23 dot wash post dot Co well that's not the Washington Post legitimate URL that is somebody trying to fish they're trying to appear to be somebody that they're not and in doing so they're trying to get you to click on the link and then once you click on that link they're going to try to get you to connect your wallet or to log in and by you doing so they now have access to your either your wallet or perhaps your email so you just need to be really careful with the links that you click on by just taking a look at the link first

before you click on it even if it's from friends even if some family members even if it's from people one of the most trusted people in the space just take a second don't be lazy look at it and make sure it's safe that gets us into our next scam which is fake websites cloned websites aren't unique to web3 this is something that's been going on for a long time but they've been a big issue because the amount of capital flowing into the space and because in web 3 if we connect our wallets well that can cause a lot of issues so sophisticated scammers what they're able to do is to copy websites with 99 accuracy so

they're almost impossible to tell apart but there's one part they can't copy the original site's URL for that reason you should know or write down the exact URLs of the exchanges wallets and protocols that you use for example if you use metamask be sure that the website's URL is metamask.io not metamask.net not metamask.com or any similar name always always look at the URL bar double check the website name before logging in and keep an eye on the lock sign to the left of the URL if something doesn't seem right you might have just landed on an unofficial website that would very much like to drain your wallets and so if you do get somewhere where you're afraid and

you don't think you should be Don't Panic just leave close the URL the most important thing is that you do not connect in any way if anybody asks you to connect your wallet or to share your email you should 100 be sure that that website is the real website one very simple way to make sure that you're safe is to have a hot wallet which is a wallet that you keep a very limited amount of capital in maybe a hundred dollars so that at worst and that's the wallet you use when you're doing things that you're a little bit unsure of so at worst maybe you lose a hundred dollars of course that would

suck but it wouldn't be the end of the world like you losing you know your entire crypto assets or some of your most expensive nfts so really important so and that that kind of gets us into the five tips of how to stay safe and I actually just jumped in I jumped ahead I got excited about how to stay safe um but here's here's what we're saying these These are the tips that can keep you safe so up to now marsu who wrote this article hasn't been scams um and other than through his own foolishness um and not following rule number one if it sounds too good to be true it is

probably too good to be true as you heard with the story of crypto cards um but in the wild west of crypto it's difficult to stay 100 safe so these tips should help you get most of the way there number one be careful with your personal data never ever ever share your private keys don't share your free seed phrase uh not even with your mom uh I mean you could share with your mom but I don't even think she'd know what to do with it um aim to share as little sensitive information as possible when interacting in web 3 especially if you're dealing with Anon accounts and projects number two use a VPN it's best to use a VPN every time you log on to an exchange or open a wallet the VPN will hide your

location and identity so it's more difficult for hackers to Target you I personally use nordvpn whenever I'm traveling or whenever I'm out of my house and using internet at a coffee shop or internet at a co-working space vpns will keep you safe two-factor authentication is your friend please please please set up two-factor authentication on sites that you frequent that way you'll receive a text or email depending upon your preferences with a code to input when you log in it may take an extra minute and I know that some people might say oh it's such a pain in the butt and but it can save you thousands of dollars and if you'd like to be extra safe you could consider a

tool such as UB key number four way to stay safe mobile data over Wi-Fi so if you're accessing crypto applications Via Mobile skip the Wi-Fi and use mobile mobile data since it's more secure and never access protocols or Wallets on public Wi-Fi that's asking for trouble always be skeptical be wary of telegram Discord and Reddit interactions and don't ever trust the random cool guy or gal who has a hot investment tip they may have good intentions but unless you have some fail safes in place it's better to avoid clicking any links they share or aping into any projects they recommend without doing your own

research number six test your transfers beforehand doing a small test transfer before transferring large amounts ensures your crypto goes where it needs to the process may take a few extra minutes but it gives you the peace of mind that your wallets are safe you guys seeing a theme here it might take extra time to keep yourself safe don't be lazy that's the key most people who get scammed get scammed when they're just rage smashing rage clicking a button because they're frustrated and they're upset and they're just trying to do something quickly if you are in a rush to do something I recommend you don't do it in that moment wait be patient even if you're feeling like oh I'm gonna miss

out on this opportunity to get this nft mint there will be other opportunities always take the time to be patient and do things in a safe slow manner it's when most of the time when accidents happen or when you're in a rush use dummy wallets if you're unsure of a daf security create a dummy wallet that you use for potentially risky transactions and use the transaction and once the transaction is complete you can send your crypto to your real wallet which never interacts with the data so as I mentioned before having different wallets for different purposes is a great idea I personally keep a hot wallet which I am willing I keep about a hundred dollars in there

and I'll interact interact that with any dap it's no worries or if you want to be even more safe you can create a dummy wallet which you use just to interact with a certain dap and then transfer anything out of your dummy wallet back to your uh your main wallet avoid holding crypto in hot wallets and on exchanges where possible keep your funds in cold storage and when you can't ensure you you diversify your funds across different exchanges and hot wallets so be very careful about leaving any funds in a in a hot wallet or in on an exchange it's much better to use a ledger or a treasure or one of the

reputable Cold Storage wallets which again they take more time and they themselves require some education to learn how to use them but that is part of self-sovereignty if you need help with any of that hop indoor Discord we're more than willing to help you with that finally how to avoid rug pulls read the white paper thoroughly and check the roadmap to decide if it's feasible verified Community engagement by joining their Discord access the team's background and be extremely careful if they're Anonymous and finally ask yourself if the project really needs a blockchain to function if it's didn't if it doesn't it's probably ngmi not gonna make it remember rule number one if it sounds to

be good too good to be true it probably is yes we all want to strike it rich without doing hard work or waiting forever wouldn't that be nice but that's not that's but that's why a that's not how life works and that's not why scams are that is why sorry that is why scams are so prevalent in web three because we all get greedy we want that quick win we want that Silver Bullet that's going to get you rich it doesn't exist I'm telling you right now can't stress this enough small consistent steps is what will actually get you to your goals don't take the easy road because nothing good ever comes easy that's why web3 Academy we're all about building

sustainable businesses in this space rather than speculating on the next big project providing value to a community is the fastest way to success but you can't be involved in web 3 without doing a little exploring right so before you sign into the next hot protocol make sure you keep this web through safety guide in mind happy exploring my friends get out there and enjoy web3 but just do so by in a safe and responsible Manner and hopefully we can limit the amount of scams that happen in space if you have any questions off of this podcast please join our Discord we will have a conversation

going on every podcast has a conversation going on in our Discord would love to hear your questions hear your thoughts and help you with any personal questions you have about your safety and your security we're all in this together and we've got a thriving community and Discord of trustworthy people who are all here to keep you safe until next time my friends have a great day thanks for listening I don't know thank you for listening to web3 Academy we hope this helps you along your web 3 journey and if it does please share this episode And subscribe so you don't miss the next one nothing in this podcast was Financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on account of what we

say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility implementation anyway so you should not take any any of this as Financial advice thank you friends and see you in the next one