HH Crypto Is Not For Technophobes

Crypto under mattress

During an upgrade to the Compound platform, a bug caused the system to transfer close to $90 million in COMP (their cryptocurrency) to random users. In a desperate tweet, Compound’s CEO begged the users to give the money back. He threatened to dox the users. (That’s a slang term for making user identities public or, in this case, reporting them to the IRS.) Then offered a 10 percent reward for “doing the right thing.”

There are many crisis management lessons here. But let’s concentrate on one of the fundamental tenets of decentralized finance (DeFi); the ability to make financial transactions without the need for a trusted intermediary. Said differently, there’s no one for Compound to go see. They can ask for the money back, but if the recipients choose to keep it, Compound has zero recourse.

As you think through the implications of using and guarding your own money without the protection of a central authority your schadenfreude will be interrupted by a sobering question; if DeFi professionals can’t keep their money safe, how can you? It’s the right question, so let’s review some of the tools and techniques you should be familiar with as you begin your DeFi journey.

Encrypting Your Crypto

The moment comes when you realize there’s real money in your crypto wallet and you start wondering about hackers and ransomware and all kinds of bad stuff. If you’ve set up a digital wallet, bought some crypto, and collected a few NFTs and you’re starting to trade across a range of marketplaces and exchanges, you are starting to experience the exceptional financial freedom the world of DeFi has to offer. Of course, there’s a catch… Now, you’re also in charge of guarding the treasury.

This is exactly as scary as it sounds, which is one of the main reasons people put their money in banks. Not only are banks good at protecting your money, in the United States, you can choose bank accounts that are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration so if something happens to the bank, your money is still safe.

1 2 3 4
View single page >> |

Want to know more? This article is an excerpt from my Amazon #1 Best Seller, Blockchain – ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.