Scam climate in Crypto and the solutions to mitigate them

I think this is a good topic that others with experience might comment on and help develop a policy for others to operate from, so lets throw some idea’s around.
My own experience tells me that in the early day’s of any profitable new idea in the world scams rise up and can be very successful just based on lack of education surrounding whatever the new idea is, we saw it with the dotcom era, we saw it with the debt relief solutions (U.S.) it was a thing with tinctures forever that dates back to who knows when, it was a big problem in the late 1800’s with mining and so many many other new developments in the world.
So how do we avoid it in the crypto streams and promote participation at the same time - its a good question for sure, scams on Cardano holders are being seen in files labeled Daedalus.whatever that could harm someone financially and mainly it is cause of the lack of clear education on the subject of crypto, which is mostly the case with all scams - a lack of education surrounding whichever project - most crypto media outlets focus on news surrounding the cryptosphere, so a noob gets little education there, if someone has no guide when they join into crypto cause they join through news sites or whatever then they are subject to crypto twitter and other media and as most of us know they are full of scammers hoping to make a buck through noobs.
So how does someone participate in creating contest’s or reward programs that might involve asking the community to contribute and navigate a path that will not be entangled in scandal or scam? - it is a good question that needs good idea’s.
I really do not want to put “Chris Non Giver Of ADA” on my tweeter just cause of the possibility of scammers impersonating me.
Hopefully there is good solutions to the problem, I would love to hear them.

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The social trust problem is a large one, but to mitigate risks smart contracts could be used for say contests and the like to avoid scams, though this further pushes the rock to trusting the contract which relies on different assumptions for the trust. I think eventually formally specified/verified contracts will end up coming about as templates which can then be reused for these kinds of things, though there’s still a lot of work to be done before anything usable by someone new to the whole ecosystem is actually available. Though technically there’s still many other attack vectors especially via social media that will be impossible to ever purge completely.

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Strong and wealthy can protect themselves but the meek need a third party overview and support. That’s why countries have laws and designated institutions (police, banking overview etc.).

I consider security to be one of three main deterrents for crypto, being:

1. Volatility
2. Security
3. Adoption

We will never have mass adoption without increased security. I personally know people who don’t want to get involved with crypto because they are afraid of hackers stealing their funds - and as we’ve seen even on this forum, it happens way too often.

What I postulate is - we should have a choice for our funds between the level of decentralization vs security. There should be an option. Believe me, most people just want their money to be secure, some are in between wanting some level of security but also the ability to fully control their funds and very few want just the decentralized full control (the third group being mostly wealthy people).

There should be an option to temporarily sacrifice your full control in order to store some of your funds in a safe vault, something that requires 2 level authentication to move funds. This way you could have part of your saving stored safely and the part you’ll need for your groceries would be kept in your wallet.

There is a reason most people in the world keep their saving in banks - it’s safer than to store it under your bed or in a wallet where a thief can reach whenever you’re not careful enough.

Another great addition to the crypto world - and it seems some are working on it - would be smart contracts forcing the buyer to pay upon the other party completing the task.

Both security and smart contracts could be achieved by a semi-centralized institution. If Cardano creates such, it would be a huge leap over other crypto and probably would make it the most popular in a while.

@anon20038177 thanks for actually picking up on this and escalating it to a topic. for some reason it hadn’t occurred to me to have done so :man_facepalming:

:100: :laughing: :point_up:

I’ve delayed my response and will continue to differ it till i’m able to have a better distilled idea…

though having said that, i’ll share that skeletal structure of the idea/my thinking.

first, a quick response to the other responses.

i believe it’s not just a technical (smart contract) solution but also a social (informed users) one. and both should be approached with the same zeal in effort.

i don’t think we should, or that it in the end will be a compromise between security or privacy. the direction that technical developments (multi-factor auth, social account recovery etc) and advancements (A.i, M.L) are headed, the individual will not need the equivalent of banks. compared to the superlative security the individual will be the epicenter of, these institutions will be comparatively vastly insecure.

now, as for the skeletal structure of the idea/my thinking. decrease the negative, increase the positive.

decrease the attack vectors of projects. in this case i think the attack surface for such exploitations is quite wide, i mean cardano has a presence on a whole bunch of social services without much thought to how these affect security as they just increase the attack surface. i forecast we’ll see a swarm of such exploitations before year end as the price increases having decentralised, hit coinbase etc. if you’ve noticed such social engineering exploits didn’t/don’t happen much for bitcoin as the window for when it was affordable and shallowly adopted has passed. eth on the other hand - given that it has just the right amount of adoption and potential upside - has been plagued by them to the point that even elon musk has commented on them, praising their (bots) ingenuity. cardano, given its wide adoption and huuuge upside, is this and then some.

increase the positive via informing the audience. i’m a believer in the ability and power of creative expression as a powerful source of learning. it’s through stories after all that we have evolved to solve problems and learn.so an idea i’m evolving is one that utilises the pervasive medium of music to meme-ify spread like a virus simplified concepts of crypto with the intent of making people less gullible. this is a concept i’ve been conceiving as a contest, it’s still in it’s early nebulous stages, but i think it has potent potential.