What is a crypto wallet security tool?
Web3 is seeing some incredible advancements in tech, especially with the way people interact with online applications.
The general method to sync to and engage with these apps is to sync your crypto wallet.
It's super easy, but it also provides a bit of a problem.
You see, a lot of people not only use their wallet to engage with Web3 tools and apps. they also use it to secure valuable crypto and NFT assets.
If, for some reason, the security of the wallet is compromised, you could lose all of your assets.
The following tools are in place specifically to help you keep your wallet, and hard-earned assets, secure.
The best services for crypto wallet security
The below isn't a complete list of the best tools for wallet security. The "best" tool, is really going to depend on how you're engaging with a project and your specific needs.
However, the below are some poplar starting points for you to check out.
Nefture is an extension that works in sync with your crypto wallet.
In essence, this dApp acts almost as a 2FA for your transactions. It will look at the smart contract for specific, common scam terms and warn you of them before you take action.
In theory, this should stop you from signing any transactions which give full control of your assets to a malicious smart contract.
Fire is another similar security solution.
With Fire, you get a small warning in your wallet to let you know whether or not the smart contract you're interacting with is malicious.
Again, this simple warning should be enough to stop you from giving complete control of your wallet to a malicious smart contract and scammer.
Why do crypto wallets need security tools?
The fact is that some people store a lot of value in their wallets. As you'd expect, wherever there is a lot of value, there are going to be people who want to take it.
Thanks to smart contracts being pretty automatic, once you've hit "sign" there's little you can do to stop the smart contract doing its thing.
It's interesting. A lot of the hacks and scams in Web3 aren't coming from faults in the tech and weaknesses in DLT, but from social engineering where they get people to agree to malicious contracts.
The wallet itself is not compromised in the sense of being hacked by an external source. The error lies with the human not reading the full terms of the contract they're agreeing to.
Common crypto wallet scams
As highlighted above, a lot of the scams in the space are thanks to social engineering.
People are tricked into agreeing to something that drains their wallet. Here's how.
Fake copycat sites
So one of the main methods of tricking someone to agree to drain their wallet is through a simple copycat site.
What scammers will do is a build an exact replica of a popular site, often an NFT collection's site.
They'll add some sort of great offer like "0.01 mint price now" and drop a wallet sync button.
Hidden in the smart contract of the agreement is a clause that will automatically transfer your funds to the scammers wallet.
And as you likely know with blockchain transactions, that's not reversible.
It's really not feasible for the majority of users to anaylse every detail of smart contracts before clicking sign. Mainly due to the lack of technical expertise.
So, these wallet security tools help identify potentially malicious clauses to help users avoid them.
How do Web3 wallet security tools work?
In short, these tools work by scanning the smart contract you're about to agree to. They're specifically looking for potentially dangerous actions hidden within.
Generally, those malicious actions will be something like "transfer all funds to wallet X".
The actual security tool often works in the same way as a. crypto wallet like MetaMask. It just sits in your browser and scans contracts when MetaMask is brought up.
If there's no issue with the contract, there will be no warning. if there is an issue, it'll flash up an obvious warning sign so you don't go ahead and sign.
Are these wallet security solutions foolproof?
They go a long way in securing your assets, but nothing is ever 100% accurate.
As soon as any new security measure is released in any industry, bad actors will actively be looking for a way to circumvent it.
The best security you can have is to remain sceptical of unknown brands, actions, and offers.
These wallet swill catch the vast majority of problems, but always employ common sense and trust your gut.