Author(s): artistik#5877

Editor(s): faevy#6563

Last updated: 24th Oct 2022

Introduction

It's important to learn safety precautions in the web 3 world as it's not centralized or owned by a single person or firm. Getting your money back after being conned, scammed or sending to the wrong address is practically not feasible. For this reason, I'd be explaining some basic safety precautions to observe. One of the major reasons people don't want to get into cryptocurrency transactions is simply because of a lack of basic knowledge about how to secure their personal information and their investments.

This problem is not only encountered by beginners as experienced users are susceptible to these frauds as, all it takes is a moment of foolishness/mistake to click on a malicious link or connect with a phishing website, and presto, your money is gone.
Security is of the utmost importance in this industry due to the vulnerability of cryptocurrencies to hacks and frauds as well as the recent, contentious suspension of withdrawals by centralized exchanges.

While setting up a wallet account, you must have come across something called a 'seed phrase'

What is a seed phrase?

A recovery phrase, also known as a seed phrase, is a string of letters and numbers that your cryptocurrency wallet generates and uses to grant you access to the funds stored in that wallet. Consider a cryptocurrency wallet to be like a password manager, and the recovery phrase to be like the master password. Therefore, if preadventure you delete or misplace the wallet, you can still get access to all of the cryptocurrency linked to it as long as you still have your recovery phrase intact.

Next I'd explain what a wallet is, as this is a very crucial point.

Wallet: What Is It?

Some may think I'm referring to physical wallets but that's not the case, I'm talking about Cryptocurrency wallets, they do not physically hold your cryptographic asset; instead, it is located on the blockchain. Instead, you can conduct transactions with your bitcoins using your wallet. That is, you can send and receive bitcoins using this wallet. Each wallet has what are known as Private and Public Keys.

What do I mean by private and public keys?
The "address" where your cryptocurrency is stored is the public key. People transmit cryptocurrency to your public key if they wish to send it to your wallet. Anyone who searches for it can see the transactions you conduct as well as the items in your wallet. You can say it's more like a bank account number when related to the banking system because your bank account number is what links your account to your name, this way you transfer and receive money through the number.

The "password" required to complete transactions is the private key. It needs to be a complete secret from everyone else.

Be aware that these keys differ from a "seed."which is a set of random words automatically created, which you should keep safely when you first set up your wallet. Especially where only you can have access to it because these are the master keys to regaining access to your wallet incase you lose your device.

Types of Wallet: Cold and Hot wallets.

Cold and hot wallets.

A hot wallet is connected to the internet, which makes it prone to attacks unlike the cold wallet which is not. To put things in perspective, a cold wallet is like a thumb drive in that it only connects when you plug it into your computer.

A prime example of a hot wallet is the in-app wallet for STEPN. Other options include custody wallets on centralized exchanges and browser- or mobile-based wallets like Phantom or Metamask.

Hardware wallets, in contrast, are cold wallets. The private keys are kept on a specific device that is offline. Users plug this device into their PCs to authorize blockchain transactions. Ledger and Trezor are two well-known manufacturers of hardware wallets.

Despite the fact that cold wallets are thought to be more secure than hot wallets.

Wallet Safety
Additionally, it is strongly advised to keep up with the most recent security advice and understand how to set up and use a cold storage wallet if you intend to purchase cryptocurrency as a long-term investment. It is very necessary that you employ the following techniques to safeguard yourself when exploring web3;

1. Never make the mistake of disclosing your seed phrase;

As explained earlier, your bitcoin wallet will generate a set of words known as a recovery phrase or seed phrase that will be required to grant you access to the cryptocurrency tied to that wallet. For no reason should you store your seed phrase online or cloud services, make sure to keep a hardcopy of it somewhere you can have access to it.

2. Don't Try Connecting Your Wallet To Any Dapp At Random.

This is a dangerous move to take, the first security precaution you should take if you're utilizing Web 3 is to avoid connecting your main wallet to any unfamiliar dapp as scammers could use this means to gain access to people's wallet.

3. Confirm that the online contacts you are communicating with are who they say they are;

Opening accounts under false identities and using those accounts to defraud unsuspecting users is simple for scammers. Unfortunately you cannot regulate who can contact you, therefore, verify whoever you're in contact with before any transactions.

4. Buy a hardware wallet;

Hardware wallets, commonly referred to as "cold storage," are safe hardware objects on which you can save your assets, giving your portfolio an added measure of security. Use a hardware wallet whenever possible to complete transactions; this will shield you from the majority of online threats.

5. Avoid clicking on links shared on Discord or Telegram;

It's important to avoid this as links can be easily redirected.

6. Use various login credentials on various websites;

It's not advisable to use the same credential across many social media or web pages. Think about utilizing a password manager, this will help you create strong and unique passwords that are challenging and difficult to guess by an intruder.

7. Avoid Dealing With Unidentified Tokens;

It is crucial to avoid investing in unknown token airdrops that show up in your wallet. There is a scam known as a "rug pull," the project's developer vanishes with all the money and you're left with worthless cryptocurrency, some con artists will employ this technique to persuade you to buy more.

8. Maintain control over apps and smart contracts by maintaining wallet access;

Check which smart contracts have access to your wallets using tools like Etherscan's Token Approval, and delete any superfluous or unauthorized programs.

9. Refrain from disclosing too much private information online;

Avoid disclosing private information like transactional information associated with your main wallet as this may most likely attract scammers. Avoid disclosing private information like transactional information associated with your main wallet.

10. Spread out your wallets;

Diversifying is one important thing to consider especially when you have lots of investments. Be sure to keep your most precious funds in a hardware wallet.

Be careful with your personal data.

When your identity is at risk, it's one thing when your crypto assets are, but quite another. Protecting your personal information is essential to preventing identity theft in the event of a single leak or breach.
Using common sense is the greatest approach to protect your personal information; under no circumstances should you divulge personal information to strangers or on social networking sites. You should generally steer clear of any transactions on open networks that can draw the notice of malicious individuals.
It is important to maintain good password hygiene by observing the following;

1.Never reuse a password
2.Select challenging and lengthy passwords.
3.Make use of a password manager
4.Be aware of the google links you click
5. Watch out for direct messages on social media
6. Don't ever download files from unknown senders
7.Constantly use 2-factor authentication

If you adhere strictly to all the guidelines explained above, then your safety condition in the web 3 world is much safer. Stay safe out there!

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