Sirwin
Sirwin
We smart: no scams if you don't participate

Hot Wallet Security: The Difference Between Mass Adoption And Adoption No Mas (Pt I)


Part 1. Outlining the problem: Wen Mass Adoption?!

Mass adoption is not about mere numbers—it is driven by a groundswell of basic, grassroot needs in search of real solutions that are built upon the bedrock of trust.

In crypto we often hear the rallying cry: “we’re still so early!” A sentiment echoed by bulls the world over, intended to inspire fellow enthusiasts to join the party, stay the course, aim for the moon and go the distance. However, after a few years, one begins to wonder why mass adoption of crypto is taking so long to mature and catch on. Sure, sure, it’s happening at double the speed of the Internet… but why has it not yet arrived? How long does “early” last? I do not mean the growth of active wallets or transactions, which are often functions of projects puffing up their own volumes and ‘liquidity locusts’ (as Andre Cronje puts it) with hundreds of addresses ‘farming’ airdrops. Such numbers can be (and too often are) easily fudged.

Case in point: Here is an interesting article that suggests that rather than being fixated upon flashy, albeit often misleading/'cooked' TPS figures, we ought to take note of USER Operations Per Second or Gas/sec. A most illuminating idea, I find...

https://cointelegraph.com/magazine/blockchain-transactions-per-second-tps-stupid-big-questions/

Indeed… Where are the throngs of actual enthusiasts? Why is the primary use case of crypto still feeding speculation and insatiable avarice, rather than alleviating genuine need and necessity? Of course, we all need to earn to survive in this game of life and there is absolutely nothing wrong with investing in projects one believes in. But… if this tech is so valuable… so absolutely indispensable, why is it that ‘no-coiners’ hardly ever feel left out or at a disadvantage? Why do they consider us mavericks flying by the seams of our pants and ‘degens’ YOLOing away our lives on a Hail Mary get-rich-quick, magical-thinking scheme? After all these years, why is Bitcoin’s market cap just 1.5T, dwarfed by the global GDP of 105T (https://www.statista.com/statistics/268750/global-gross-domestic-product-gdp/), not to mention the derivatives market that’s a hulking 600+T of the global economy? In short: if this is the most efficient, mathematically perfect money… why has the world not taken crypto seriously? Yes, yes, ETFs are here and all that jazz—that’s just more speculation and soon… massive manipulation. Is there no organic need for crypto? Is it yet another synthetic derivative game of musical chairs? Or does the world really prefer dystopian TradFi control, election fraud and Web2 surveillance? If so… why?

stop falling for scams--Goldberg

True, we could say that the blockchain is the fastest adoption of any technology… but for the wrong reasons, so the numbers don’t tell the entire story. Rather than being a vital tool to address inequality and societal cohesion, the blockchain has become the world’s largest unregulated casino. Most projects would simply not exist without speculation. Let’s translate that twice-faster-than-the-Internet adoption into reality. Ask yourself this: if there was ZERO expectation of profit, how many investors, visionaries and backers would crypto projects have? How many true believers are out there? Exactly… not many.

People endlessly FUD the genius of Cardano’s or Polkadot’s stable, scholarly ethos, when they ought to be inspired to identify, address and solve real-world pain-points and build loyal communities by creating excellent user experiences. Instead, projects tend to focus on headline-grabbing innovation, speed and token pumping, rushing half-baked products to launch to appease and enrich insiders, in concert with the ebbs and flows of the market cycle. True value is accrued via trust that is built by a relentless commitment to excellence—not by pumping-and-dumping hype to make the numbers go up.

Web 3 is probably the chief narrative in crypto, it permeates and exceeds SocialFi, DeFi, GameFi/Metaverse, DePin, etc. The firmament of the Cryptoverse is upheld by several mighty infrastructure pillars, including: secure Layer 1s, CExs and DExs, stablecoins and hot wallets. It is also guided by powerful principles, including: interoperability, decentralisation, scalability and, chief among them: SECURITY. None of these ideals make any sense without top-notch security. THIS is why the world puts up with TradFi. Could the bank seize our assets on a whim? Sure. But there would be accountability, as we could sue them into oblivion. Could my funds be stolen by a third party? Not really—banks are insured and use 2FA. In a word, all funds are SAFU. Security is NOT just a convenience or luxury—it’s an absolute necessity!

The primary problematic use case of crypto is not money laundering, as the governments and banksters would have us believe (fiat is far easier to launder... as owners of the primary laundromat, they well know this). It is the wonky security that’s putting a drag on mass adoption of the blockchain tech, i.e., users’ vulnerability to scams, rugs and pump and dumps.

Sus fry scam or not?

 

SOS MetaMask, we’re getting robbed!

Last week a good friend of mine got robbed by a wallet-draining bot... Such liquidity leeches are plentiful in crypto and are even rented out by their devs, who also get kickbacks from the stolen funds.

Venom Drainer has stolen nearly $27.5 million since February, the most out of the group. Inferno Drainer is second with over $21.2 million stolen since January, but has three times the number of victims at nearly 45,800.”

Full article here: https://cointelegraph.com/news/cypto-drainers-pink-pussy-venom-and-inferno-steal-millions

A quick search on YouTube revealed a channel that has been actively thriving for over a year, advertising software for such scams. How many others are out there? Here’s a video titled: “Opensea Drainer, Uniswap & PERMIT.Drain all NFTs, ERC20, ETH💰”

https://www.youtube.com/watch?v=ooq4XG6zVis

Malicious links hide in the promoted results of Google, X, Fb and other Web2 platforms, which are known to aggressively clampdown on hardworking NFT artists who’re just trying to make a living through their art. Of course, the Web2 giants will address these scams at some point, when they begin affecting their bottom lines… as users will stop trusting/clicking on promoted links.

Here’s a video from a couple of years back when MetaMask phishing scams were already running rampant. With the airdrop mania in the air, it’s heart-breaking to imagine how many people will get needlessly REKT, all because MetaMask has not solved the issue of inadequate security:

https://www.youtube.com/watch?v=-Yyi_PHdFSk

Are we really so gullible as to believe that TradFi and Web 2.0 moguls are friends of the Cryptoverse? Do we naïvely believe that they are here to build, be constructive and help us succeed? If you believe that, I have a gorgeous bank to sell you!
Pah! Right and honourable people’s champions against inequality they are! Put their rhetoric aside and focus upon their actions. Let’s not kid ourselves—crypto would change everything… and those above don’t want any change or challenge to their bastions of monopoly.

Scammer on YT

A year ago, my friend tried launching an NFT collection, promoting it on a modest budget via Web 2.0 platforms Twitter and Fb. Indeed, she PAID for advertising and stuck to the guidelines, not mentioning crypto or NFTs. The campaign was killed within 12 hours of launch. The scam above has endured for over a year. So…Why do you suppose they come down like a tonne of bricks on honest artists, while allowing scammers’ videos to endure, run and run? Could it possibly be because facilitating horrible UX in crypto is a matter of policy? Could it be that they WANT people get REKT and then turn tail in fear, run back to the convenience and safety of TradFi and become ardent anti-crypto advocates?

Nooo… they’d never be that devious, would they?! Duh.

Choose the red pill, friends: Keeping the forces of innovation and change embroiled and trapped in self-conflict… treading stagnant water in nebulous chaos… this is not a bug of the system—it’s a key feature!

Red Pill

I reported this channel last week, 96 hours ago and it’s still up. Do you see?

Just as the SEC does everything to ensure that retail investors get royally REKT and never again dare venture beyond the safety of ‘Plato’s Cave’ of TradFi… Do? You? See?!

So let’s stop cheering and chanting about BlackRock & Co's ETFs and focus on what truly IS important: our people. Providing a safe, liberating, empowering and enjoyable space for every user of the blockchain.

Otherwise, we’re just helping TradFi win and keep us down.

Thus, Web 2.0 only cares about profits, while in Web 3 (thus far), devs have been enthralled and mesmerised by decentralisation (a.k.a., zero accountability for the ridiculous levels of risk levied upon the users) and scalability. Neither approach is sustainable. Devs can’t just shirk responsibility to provide a safe environment and pleasurable experience to the users of their products and expect scam victims to stick around and build a community. This is largely what causes the violent cycles in crypto: Every 4 years, amplified by the MSM, the hype of the Bitcoin halving and the rags-to-riches/lambo stories of the crypto bros incite enough n00bs to take the plunge. A critical mass of new investors FOMOs in, gets harvested and, ultimately, royally REKT when the music stops, then they limp off to lick their wounds and the space goes dark for a couple of years, whereupon the hype train begins anew. This is neither sustainable nor desirable. Horrendous UX, that make terrible showcase for the industry.

But I digress… The real problem is not that scammers and leeches exist, the problem is that these parasites are not aggressively confronted and countered by the developers of Web3 applications. As thought their right to exist and victimise blockchain users is some perverse freedom of navigation or speech.

dApp devs tend to shrug and say: well, self-custody is 100% the responsibility of the user, who should carefully DYOR before connecting their wallet to any site.

In other words, victims should have known better. That’s like saying that everyone using the blockchain should be a high-level psychic dev.

Sarcastic Wonka: Woops!

If we are serious about mass adoption, we must appreciate and respect that from the perspective of TradFi users, blockchain tech is already intricate to the point of being convoluted and, oftentimes, inconvenient to use. Freedom is a great ideal, but not at the risk of being bankrupted in a heartbeat by an unknown threat. Ask yourself: why has the ‘dark web’ not seen mass adoption? Surely, there is so much more freedom of speech and information in its vast void… Yes. It’s overly complex and dangerous, which can make for a devastating UX, hence, the potential rewards of perceived freedom are countered by ridiculous, extreme risk, so the juice is just not worth the squeeze for 99% of the people.

No, NO. We don’t need CBDC-levels of centralised surveillance and control. What we DO need, however, are wallets protected by added layers/levers of user-imposed access and transaction control (e.g., daily limits, YubiKey, 2FA and multiple passwords when sending to wallets that are younger than 1 month). More on solutions in Part 2 of this piece.

I have read MetaMask’s case against 2FA implementation and disagree with their underlying thesis. As Adam Savage always says: I reject your reality and substitute my own! If Social platforms like Torum, gaming sites and TradFi can manage to implement 2FA, surely, so can MetaMask, the most popular Hot Wallet Provider in the industry. Don't give me that! Where there is a will, there IS a way.

DO IT

https://support.metamask.io/hc/en-us/articles/4415327052443-When-two-factor-authentication

They open with: “In some ways, it [MetaMask] already has better security than what you’re used to from 2FA, but in other ways users may find themselves wielding more responsibility for their funds than they’re comfortable with…” You mean users are more comfortable with having their wallets drained, like what happened to my friend? I think not!

Epic facepalm

 

Alright Friends, let’s call it a chapter. Thank you for reading and thinking along! In the second and final part of this article, I will offer you some more food for thought as well as some out-of-the-box solutions to get the conversation going.

Continue reading in Part II.

###

About me

I am a copywriter and marketing specialist seeking exciting work in the blockchain industry. I am a serial idea-generator, skilled at problem solving, crafting product reviews/feedback (perhaps this article is a testament to that)), planning campaigns and online events, envisaging and overseeing loyalty programmes, as well as building up and maintaining stable, sustainable communities.

I also have experience in storytelling, writing fiction/fantasy and would be delighted to work on a storyline, lore or marketing in crypto-related entertainment such as film or video game development.

I live in the Northern EU. You can always find me hanging out and having fun on the Torum #SocialFi platform (callsign: @Tigerius).

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Tigerius von TORUM
Tigerius von TORUM

Writer. Reader. Thinker. Organiser and patron of the Animus Art Festival on TORUM, #AAFoT.


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