WEB 3.0 WALLETS FOR DEFI

Posted 18 August, 2020

Features and Benefits of Web 3.0 Wallets

 

Centralized platforms running on huge servers still cannot provide complete data security. Meanwhile, it is security that is a key factor for individuals and businesses.

 

One new technology is capable of helping to increase the reliability of storage of funds - blockchain. Provided that data is decentralized, confidential information is not stored in the databases of companies and large data centers. The first project to fully utilize this technology was Bitcoin. Now new projects appear almost every day.

 

The main purpose of the web 3.0 wallet is to allow users to store their own funds without relying on third parties to store assets. Basically, it leaves you in charge of your funds with complete freedom to do whatever you want. The only person in charge of your funds is you, which is quite a revolutionary concept when you consider that banks ultimately control your money.

 

Unlike centralized wallets, DeFi users do not need to verify their identity or provide any background information. The anonymity of wallets attracts many and means that your identity will never be revealed.

 

Pros of wallets using Web 3.0 technological developments:

  • powerful privacy protection;
  • personal responsibility for the storage of funds - no need to entrust this prerogative to companies;
  • lack of a central point of control;
  • lack of intermediaries;
  • full data encryption;
  • full control over your information;
  • minimizing the number of hacks and information leaks - decentralization leads to the fact that an attacker needs to turn off the entire network in order to harm;
  • unlimited access regardless of country, citizenship, income, or other sociological and demographic factors;
  • fail-safe operation - since there is no single point of failure, the risk of service outage is minimal.

 

Data is stored on distributed nodes, and many backups prevent the server from crashing or being taken over by attackers.

 

Popular Web 3.0 wallets at the moment

 

As the DeFi ecosystem grows, the number of new wallets grows and grows, making it harder to choose the best one.

 

Here are the projects that are currently considered the best in terms of technological advancement, safety, and ease of use:

  • MetaMask - one of the most popular ways to access dApps (decentralized applications usually built on the Ethereum blockchain). The wallet was developed by Consensys.
  • Trust Wallet - a wallet officially supported by the Binance crypto exchange - it allows users to interact directly with a large selection of dApps. It does not store personal data of users, it is easy to use even for beginners.
  • Mist is a browser developed by the Ethereum Foundation to work with decentralized applications. Fully syncs with Ethereum Network. Allows you to perform all financial transactions and earn in some dApps.
  • Coinbase Wallet - a stand-alone application that allows you to store cryptoassets and use a decentralized network using the dApps browser. No registration required. Keys are stored directly on the device. Unlike the regular Coinbase app, you cannot buy cryptocurrency with fiat here.
  • Argent - decentralized wallet for mobile devices with the ability to set a biometric lock or set a daily transaction limit. A distinctive feature is recovery without a seed phrase, using the so-called Guardians (these can be people or devices that you trust).

As the DeFi ecosystem grows, the number of new wallets is growing and increasing.

 

Safety

 

A little about the risks of Web3 wallets. The most common of these is phishing attacks, which aim to steal passwords and personal information from users. Such schemes have been seen in relation to MetaMask. Hacking methods if the wallet is unlocked:

  • Address spoofing during an outgoing transaction. The phishing site creates a fake notification about the unsuccessful completion of the last outgoing transaction, and all the information in this notification is completely real. Further, the site offers to make a transaction for the same amount, but already substitutes its address.
  • Address spoofing during an incoming transaction. Falsified in a similar way, requiring users to sign - ostensibly to receive. It is important to remember that the receipt of funds does not really require any action.
  • Imitation of the Metamask window and replacement of the wallet window by copying the CSS style. This window displays all transaction data, but the last one is marked as unsuccessful. When you try to repeat it, the address required by the scammers will be substituted.
  • Fake wallet pop-ups where user can enter password / passphrase / private key.
  • If the wallet is blocked, then the main task of the attacker is to unblock it. As a rule, this is achieved using the same fake notifications.
  • Finally, the cybercriminals' site can simply wait for unlocking, being on another tab, and as soon as it sees that the wallet is unlocked, it immediately sends a notification. Therefore, it is recommended to keep no more than one tab open in the browser when using the wallet.

 

Another type of scam is fake wallets on Google Play, which Google is not actively fighting against. The same Metamask, before the appearance of the official application, appeared in stores and stole user funds.

 

Conclusion

 

Web 3.0, in fact, is a new Internet, where storage and exchange of information, semantic search for content, decentralized interaction of individuals and companies, regardless of their form of activity or other characteristics, are implemented in a much safer way. The world needs such a technology, given the constant news about hacking of one or another centralized company. Renowned software activist Tim O'Reilly believes that applications implemented in the framework of web 3.0 can erase the boundaries between online and offline, significantly advance the mechanisms of interaction between the Internet and the physical world.

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