Scams are shattering mainstream confidence in crypto, perhaps irreparably. A large-scale, coordinated education initiative can help ensure that they don’t.
The common narrative around the prevailing threats to mainstream adoption of cryptocurrencies is that regulators will put the kibosh on their legality, it has to get much easier for “ordinary” people to use, and the magnitude of its volatility has to be tempered.
All of these are true. But there’s something perhaps just as consequential: scams, hacks, fraudulent exchanges, dumps and the like. Why? Every attack leaves a scar. And the scars are mounting fast.
According to a study by Chainalysis, scammers got away with $14 billion worth of crypto in 2021, which represents hundreds of thousands — maybe millions — of victims in a community where every negative experience has a voice in an echo chamber.
Today, very few are immune to scams and attacks
The urgency for reigning in the dark web is rooted in behavioral economics: loss aversion. For most in the mainstream, once they lose a “significant” amount of money to a scam or hack, there’s a good chance they’ll be done with the whole asset class — if not forever, for a very long time. The specter of loss drowns the potential for gain.
And, unfortunately, the likelihood today of virtually every crypto trader and/or user being victimized is quite high. (Even Vitalik Buterin, co-founder of Ethereum, was the victim of a scam, which is described in the book The Cryptopians.) The bad guys are simply that good.
Example one. You read on your Reddit that your favorite token is doing an airdrop. You’ve heard about others receiving these “free gifts of money,” so you jump on the link and are taken to a page where you see what looks like a live trade book. “For every token you send us, up to 500, we’ll send you back two as your reward,” it says. And there’s a timer indicating just 30 minutes left in the event; you better rush to get your tokens. So you do. What you soon learn is that the Reddit channel where you learned about the “offer” wasn’t official; the airdrop was a scam; the timer continuously restarted itself; and you just sent your tokens to a total stranger.
Example two. You type in the URL “coinbase.pro.com” and are presented with a screen saying your account has been compromised — and given a number to call. The person on the other side asks for your date of birth, email address and account information so that they can reset your username and password. You start to grow suspicious but are feeling pressured. So, you provide what they’ve asked for, while a knot in your gut senses that you provided way too much information than you should have. Before long, coins are missing from your account. The proper URL it turns out was “pro.coinbase.com.”
Example three. You’re new to the space and feel like you’ve missed out on the coins that have been “overnight sensations” and made so many people so much money. So, when you see the opportunity to invest in SQUID Coin — which will become part of a pay-to-play online game based on Squid Game, the popular Netflix series, you jump on it. Two weeks later, however, you learn that the developers — whose names are nowhere to be found — have abandoned the project and cleverly set an exit trap called an “anti-dumping mechanism.” Your coins are worthless. You’ve just had the rug pulled out from under you.
Now imagine these actual scams, and thousands of others, being repeated over and over and over again — 24/7.
With each passing day, momentum and enthusiasm are compromised
Against that constant, devious drumbeat, high-profile attacks further accentuate doubts: Axie Infinity’s $650-million Ronin Bridge hack, Beanstalk Farms’ $182-million flash loan attack, and Crypto.com’s $33-million hack of user wallets, for example. (These have all happened just this year.)
Before long, a lawless narrative dominates. Meanwhile, ongoing mainstream adoption brings along with it even more nefarious opportunities as “newbies” — who simply aren’t paying attention to best practices in safeguarding their funds — are further victimized. Millions of would-be participants are now watching on the sidelines and preaching “I told you so” to the newest victims.
Which leads me to my central proposition: an urgent need to go on the offensive. A marketing offensive.
Yes, the quest for innovative new safeguards and security features is warranted and welcomed. But it’s not enough.
What’s needed now is a Manhattan Project, a Marshall Plan, or any other analogy you can think of that means galvanizing massive resources quickly and producing a viable solution to a problem. Because let’s face it, revolutions in tech can be bumpy; it’s going to get a lot worse before it gets better.
Crypto needs a rallying cry, a manifesto, and an educated public to ensure that its awesome potential is realized. In short, get in front of the narrative, lead the discussion, empower safe adoption, and help the crypto community’s newest participants grow hand-in-hand with its creators. Crypto needs a member-funded, coordinated campaign.
Introducing the Crypto With Confidence Project
Here’s what I propose:
- The top 25 projects by market capitalization, the top 10 centralized exchanges, the top five prime brokers, the top three global trade associations and other stakeholders band together to create a foundation, a decentralized autonomous organization, or other entity in which category consumer education is all it does to ensure that people can Crypto With Confidence. (Treat “crypto” like a verb? Why not.)
- Members of the group, which provide funding and marketplace leadership, are promoted as “sponsors” of the ensuing campaigns, which help them to assert their commitment to security and advocate their brands. It also projects unity.
- Job 1: Create the equivalent of public service announcements and “how to” content to help consumers be more vigilant about the threats they face. Nestled somewhere between “You can do it!” and “Watch out!” — with “Isn’t new technology awesome!” wedged in between — the idea is to groom and educate an activist public in thwarting crypto crime and provide the calm and confidence to enthusiastically participate in crypto and Web3.
- Job 1a: Create a mnemonic such as PARK that can be used universally. For example: “Before you put a transaction into motion, shift into PARK — Pause, Assess, Request, Keep.” Pause to ask the question(s), Is it too good to be true? Is it unusual? Assess the company, project and/or people you’re engaging with. Do you know them? Do they know you? Have you done your homework? Request information, ask questions, and make sure you’re behaving responsibly. Keep your private keys safe and share them with nobody other than those you’re okay with having access to your funds. There are, of course, many ways to approach this.
- Now, to set the right tone and ensure it succeeds, it’s critical to make the effort “entertaining.” Really entertaining — so that I can’t avoid paying attention, so that a sense of seriousness is communicated without it being turn-me-off serious, so that it’s clear that something which is destined for mainstream adoption is acting in a very mainstream manner. Think Marvel characters defeating punk scammers or a rotating cast of A-list actors playing the pseudonymous Satoshi Nakamoto. And this can’t be a one-and-done kind of thing. It needs to kick off big then become a continuous campaign.
- Incorporate marketing best practices: create a curriculum of content, including a course that concludes with certification; drive continuous engagement via newsletters, Discord or Telegram channels, email journeys, etc.; reward them for taking the time to become smarter and more vigilant with — you got it — crypto.
Think of it: not only will the Crypto With Confidence Project accelerate best practices in safety and security, it’ll help mitigate a central argument of regulators; consumers and investors can’t protect themselves.
Look, Web3 is still in its infancy. The perceptions, attitudes and behaviors that are forged today are likely to have material impact for decades to come. If venture capitalists can raise billions to fund new projects and protocols, the community can certainly come together to make a massive statement about how it is collectively looking out for the welfare and best interests of the people it hopes to engage.
So, let’s go. I’m in. Are you?
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.