Exploring Blockchain Safely: Measure Twice, Transact Once

We often talk about blockchain technology and the great transformation it is bringing to the world, which is very exciting, right?

We see instant payments across the world, cross-border transactions, access to new financial instruments, fully decentralized organizations, humanitarian aid being distributed to displaced people, and many, many more.

There is no doubt that we’ve seen the ecosystem mature during the last years a large number of use cases flourishing and people being impacted.

More recently we started seeing more and more excitement across the communities not only about the use cases but also around great news like the launch of Stellar’s Soroban, but also around the next Bitcoin Halving which is coming closer each day and generally brings big prices swings to the whole crypto ecosystem.

As an active participant in these ecosystems, I share in the excitement but also harbor concerns.

The path of innovation, while illuminated by the potential of blockchain, is shadowed by complexities and challenges that demand our attention.

Blockchain: a double-edged sword

Like any new emerging technology, blockchain solves certain problems and facilitates some hard processes.

When new opportunities like these come out, they help us as a society to go further and grow stronger, bringing assistance to those in need and paving the way for new exciting solutions to arise.

This is all great, but it comes with a price.

During the process of maturing a new technology, we’re not yet sure where it is going to lead us so builders take the lead in experimenting and exploring these opportunities.

If you think about the famous dot-com bubble, we had a big growth in internet adoption and spread that came with several new businesses and solutions being born.

These were the builders and explorers of that time and although many of those businesses didn’t survive, we can definitely look back and affirm that those who did greatly impacted the way we live today, making that technology a core aspect of our day-to-day lives.

Echoes of the Past? Blockchain and the Next Tech Boom

However, that isn’t the whole picture, there is another side of the spectrum, which I believe is how people engage with this new technology.

If you take any young person born after the turn of the century today, you can safely assume they are proficient in engaging with technology and the web.

They were born into it as it was maturing and constantly growing around them. Now, if we were able to go back to the early 2000s and interview the average person from that time, their experience would be much different.

They would probably be familiar with radio, and television but at most telephones and fax machines for communication. The internet as we know it was something very new at that time and people had to learn how to engage with it.

This process of familiarizing with the technology while it is not yet mature is not easy for the general public because it was not yet tailored to properly attend to this audience with a simple experience and in a safe way.

I remember being in my teen years and learning how to use a dial-up connection to “surf the internet” and talk to my friends, but the same process was strange and scary to my parents. 

In the same way, that the general public was learning how to use this new thing, scammers and criminals were also improving their crafts to leverage this new technology.

It took time for regulation to catch up and understand the risks people face when being in this new environment, which today comes in the form of data protection policies, cyber division in federal agencies around the world, and even digital warfare.

Nowadays, there are still a lot of crimes and malicious activity on the web but we as the general public are much more prepared to handle it.

The technology matured to provide a safer environment, solutions were built to protect the people, the regulation came to oversee and enforce secure policies and most importantly, we as an audience learned more about the technology and how to engage with it. 

Blockchain is no different

The blockchain space is currently where the internet was in its infancy — full of potential but also rife with challenges.

We’re on this path of building maturity, improving the environment, and defining regulations and policies, but it takes time.

At this moment, we’re in this middle spot in which a lot of people have access to this technology in different ways but don’t understand what it means and how it works, which makes them the perfect target for criminals and scammers.

These aren’t the tokens you’re looking for!

As an enthusiast and professional in the area, I like to often navigate among blockchain communities on different platforms and engage in discussions.

Most of those are technical communities on Discord with other professionals and builders, but often I also go to communities like Reddit where you start engaging with a lot of enthusiasts of the technology who are excited about it but don’t necessarily have a technical background and deep understanding of how it works.

Recently, I was approached by someone enquiring about Stellar’s Soroban, which we have been discussing a lot more lately and has been causing excitement in the community.

This person was curious about Soroban and its impact on the community but then they asked about Soroban’s “price” and “acquiring” it. That got me very confused.

Here I won’t dive deep into this topic as we’ve covered in past articles such as A Guide to Soroban in Defining DeFi on the Stellar Network and examples like Yield-Bearing Assets on Stellar: Unlocking Potential with Soroban.

In summary, Soroban is a smart contracts platform that was built by the Stellar network and integrates with its protocol enabling smart contract-based solutions to be built and executed with the Stellar network. So you might see why I was confused as Soroban is more like an infrastructure than an asset.

Excitement Can Be Blinding

Continuing with the discussion, the person referred to seeing Soroban and investing in it on LOBSTR, a well-known mobile wallet from the Stellar ecosystem. This provided the piece of evidence that I needed to paint the picture of what was happening here. 

You see, Stellar is a great network for asset tokenization.

It provides a whole set of functionalities aimed at builders, to facilitate creating digital assets and applying a set of best practices and mechanisms to manage these assets safely within the Stellar ecosystem.

This makes it ideal for asset issuance and digital payments but a key element in this equation is trust. As a public network, it is an infrastructure that provides a neutral protocol to anyone willing to build on it, such as the Ethereum network or the NEAR protocol and so on.

This is common in the blockchain space of public ledgers but something that people are not entirely familiar with in the general public.

Often I saw in the past people referred to the internet as being a company or some institution that should be held accountable for anything within its domains.

Similarly, people are still learning about how blockchain works and how malicious entities can still leverage this technology to scam people.

A key element in assets in Stellar is the way asset issuers tie their identities and share information about the assets they create.

There is a standard in the ecosystem (SEP01) specifically created for this process. When integrating an asset like this into their services, builders do a diligent process of analyzing the assets and verifying if the issuer of those assets is a trustworthy entity.

This generally happens behind the scenes and the audience can simply use their services knowing this process was carried out as they trust their service providers.

Going back to LOBSTR, it is a great wallet and one of the best solutions in the ecosystem. It integrates seamlessly with several services and functionalities and provides it to the end user with ease.

I used this wallet constantly for some years, but there is a catch.

Although it is a great application, I would say it is an advanced one, which should be used with caution and responsibility. Some of their features, like the ‘swap’ functionality,  were built gracefully to integrate with the whole space of decentralized markets on Stellar and provide a central hub to convert assets between any existing markets in Stellar.

This is a powerful tool that allows the end user to easily access new financial instruments but also requires the user to know what they’re doing and be diligent about whom they interact with.

By providing access to the whole space of decentralized markets, this feature expects the end user to make their assessment and do the homework of deciding which assets they trust. You might see where this is going.

When the said person, saw the excitement and discussions about Soroban, they decided to look further into it and find ways of engaging with it, which led them to search for Soroban in the decentralized markets.

Is This Project Legit? Don’t Just Trust, Verify

A simple search for assets named “Soroban” returns today more than a dozen different assets, issued by different entities being offered for exchange, and none of those are directly related to the Soroban platform.

Those could be legit businesses trying to leverage the excitement around the platform or simply scammers trying to score some money from the general public.

The important thing is that none of those is supported by the SDF (Stellar Development Foundation) or is directly related to the platform and its inner workings.

What kind of audience are you?

The fact is that blockchain as a technology is still very new and it will take time for people to familiarize themselves and know how to engage with it safely.

LOBSTR in this example, is a great tool that provides a simple-to-use interface and connects people to the entire infrastructure within the Stellar ecosystem but it is up to the user to be diligent and evaluate who they trust.

Similarly, using a browser, we navigate through the internet every day, and tools like Chrome will make everything at their reach to provide us with a safe experience and warn us about the risks but we can still access malicious websites and engage with unsafe sources if choose to.

As the tools are maturing in the blockchain ecosystem, they’ll be more and more equipped with functionalities that automatically detect cryptocurrency scams or warn us about risks but in the meantime, we need to be careful with what we do.

My Two Satoshis: Building Your Blockchain Comfort Zone

Personally, whenever I’m among friends and the community, I would tell them to be careful and avoid advanced tools while they’re still building an understanding of how it all works.

In the Stellar ecosystem, I would refer these people to wallets like the Beans app and other products targeted to this kind of audience, ensuring that only trusted and curated services are provided to their users.

Nothing is risk-free but this ensures a layer of trust in an audit is present to prevent you from being exposed to known vulnerabilities.

Here, my takeaway would be to understand where you are as an audience.

So, if you’re not confident in your knowledge and understanding of the technical aspects and risks associated with a new technology, services, and assets: be careful about how much you expose yourself.

Search for solutions that are provided by trusted entities and targeted to an audience like you. Don’t jump into advanced tools and instruments that you don’t understand or can’t be sure are from a trusted provider as this makes you vulnerable. 

While we’re still not there in adoption and regulation, we as the audience are the strong element to define how much risk we’re being exposed to, so we must learn how to be diligent and careful in how we engage with this technology.

Staying Informed, Staying Safe in Blockchain 

In conclusion, the promise of blockchain technology is vast, offering revolutionary changes across various sectors.

However, this potential comes with challenges, including the risk of scams and exploitation.

The blockchain community must prioritize education, security, and transparency to ensure safe navigation through this innovative landscape.

By adopting a responsible approach, we can harness blockchain’s full potential while safeguarding against its pitfalls. Let’s move forward with informed optimism, contributing to a secure and thriving blockchain ecosystem!