Do You Have Control of Your Cryptocurrencies?
Nowadays, it’s easy to own some sort of cryptocurrencies, for example, it’s easy to own a few parts of Bitcoin. But is it safe to own some form of Bitcoin on any platform? That’s what we are going to discuss today…
There are many ways to enter the crypto market. First, you should learn the two main channels. First, of we have the centralized exchanges, these are for example;
- Binance;
- Coinbase Exchange;
- Kraken.
But there are also many more depending on your location.
Next up we have the decentralized exchanges called DeX, these are for example;
- SushiSwap;
- PancakeSwaps(V2);
- Uniswap(V3)
Main Difference
The most significant difference about a platform, for example, Binance and a Uniswap, is that at a DeX exchange, you own the access keys to your coins/cryptocurrencies/tokens. Due to the measure of Know Your Customer(KYC for short), set in place by the financial authorities or governmental entities. This measurement isn’t bad, only it will hurt the investor.
With the many Cyberattacks going on in today’s world, people aren’t that aware of the potential danger of uploading your personal information to such centralized exchanges. If there is an attack on a centralized exchange, you can lose your money and also your personal information. This can be, for example, your National Security Number, Age, Name, and many more. In the end, this can lead to identity fraud, in which the investor can be damaged.
Choosing a DeX can minimize the potential danger of such an attack. To access a DeX you need an online wallet. A good example is a wallet called MetaMask. This is a browser extension that lets you run dApps without being part of the Ethereum network as an Ethereum Node. Instead, it lets you connect to another Ethereum Node. With a MetaMask wallet, you can connect to the different DeX platforms, without giving away any personal data. You just need to remember your backup phrase if you are switching from a browser, and that’s it!
Still, Some Dangers left!
Even though using a MetaMask wallet is relatively safer than a centralized platform, there are is still some dangers left.
The common dangers are:
- The use of your MetaMask wallet for free token/crypto Airdrops
- The most simplistic attack, a phishing mail.
Thanks to the creation of airdrops, anyone can participate in an event to win x-amount of tokens. Every so often, there is a catch to these Airdrops. It can be servery misused, which can result in getting scam tokens. Having tokens with no value isn’t that bad if only your wallet address weren’t available to the whole world. Yes, you heard that right, your MetaMask wallet address is available to the millions of people accessing the internet. Again, this is also not bad! Having transparency in the use of MetaMask and on Blockchain is mandatory. You can view everyone's wallet, and so can they.
So be careful where you put your personal information, even if it’s an exchange platform. Always do enough research and never trust someone you never met.
Some Useful Tips
Here are some useful tips to help you out on your journey into the crypto market.
Foremost, always do your research on the project you want to invest in. Read the white paper(s), follow the project on their social media, and if possible, follow them on an online channel where they answer your questions.
If the offer is too good to be true or promises are being made that appear unrealistic, it usually is. Trust your gut feeling.
Be aware of the pump and dump scheme of some coins/tokens. People are actively promoting scam tokens to get their profit and not of the project.
In future articles, I will make more emphasis on the set-up of a MetaMask wallet as well the difference of Blockchains. Let us all explore the wonderful world of Blockchain!
