Sugarcane Podcast

What can I do with Crypto? | Wallets, NFTs, and Safety Measures | Ep 02

July 18, 2023 Sugarcane Episode 2
Sugarcane Podcast
What can I do with Crypto? | Wallets, NFTs, and Safety Measures | Ep 02
Show Notes Transcript Chapter Markers

Rudy and Sheldon, are back with another exciting episode to shed some light on what you can do with crypto. We dissect the intricacies of crypto wallets, talk about why Bitcoin and Ethereum can't play nice, and guide you through the labyrinth of purchasing an NFT. We emphasize the significance of your recovery phrase - the lifeline of your crypto assets. In this high-risk digital arena, losing your hardware wallet doesn't have to mean losing your crypto currency. We stress the importance of due diligence when dealing with platforms you encounter, especially on Twitter. 

We conclude our digital journey by exploring the crossroads of Bitcoin, Ethereum, DeFi, and NFTs. Let's delve into potential implications and the value of being secure in this shared space. Stay tuned, and let's enjoy this tasty tidbit of crypto!

Links: 🔗 Website - Podcast - YouTube - Twitter - Discord - TikTok

Disclaimer: 🚨 The information provided across all of Sugarcane's communication channels is for informational and entertainment purposes only. It should not be construed as financial or investment advice. Consult with a financial professional before making any investment decisions.

Rudy:

Welcome everyone to the next episode of the Sure-Kane podcast with me, rudy and Sheldon. Hey, i'm Sheldon, we're back at it. We've got more things to discuss today because I think the next step in crypto is you know, once you kind of understand it. Sheldon explained to me last week how it all works and kind of what the blockchain is doing in the back end and the scenes behind everything. So today I'm like all right, it's time to buy crypto. So easily, set up a Coinbase account or whatever exchange you want to use typically a centralized exchange. But now that I have crypto, now I bought some Ethereum, i bought some Bitcoin. and now I'm looking at these people telling me oh, you should move your crypto to MetaMask and start using these different protocols and getting NFTs. And I'm like all right, i'm going to try it out.

Rudy:

Sheldon, like I'm looking at these wallets. There's so many different types of wallets MetaMask, frane. Even Coinbase has their own wallet. There's too many. I don't know what they're all doing Mobile wallets, web wallets, like why, why so many And what's going on with them?

Sheldon:

Yeah, so basically the idea is that take a quick step back the MetaMask. You can come in the browser, so the browser extension, or you can download the actual mobile app itself, and the idea is that what it does? it spins up an address on the blockchain for you. So you now have an address that you can both send crypto from, that you actually have the keys to send the crypto from it and then you can receive crypto to that address. You can think of it as an email address And so when you actually go through Coinbase and you buy the Ethereum on there or any other token like crypto token, you can then go through Coinbase and actually click to send it to a particular address. And if you're looking at MetaMask, you can put that MetaMask in the drop down or you can mobile app. It gives you a 40 digit hexadecimal number that you can then send from Coinbase to yourself, which is the MetaMask wallet.

Rudy:

That makes sense, but does MetaMask control it? Yeah, that's a great question.

Sheldon:

So MetaMask itself, the organization, the company, does not control the actual wallet in the Ethereum computer. That's now a wallet that's stuck to your computer, that that's stored the keys locally on your device. There's no company that has actually controlled the assets that gets into that particular plug-in or actual mobile app.

Rudy:

So that's why they're so strict on making sure you save your recovery phrase and burning that phrase down and storing it somewhere safe. Yeah, because of these things.

Sheldon:

Yeah, those, those, those, those I think it's like 12 words that you get Those are like really the way you can generate your wallet again, And if you don't write that down or save it somewhere, there's no way that you can actually get your assets back right now, like from without from those floors. Yeah, it's pretty intense for now.

Rudy:

So is it one wallet that I'll have with MetaMask? Do I have to make a? how do I get more wallets? What's the recovery phrase do with all those wallets?

Sheldon:

So, technically speaking, like the actual words that you get, they generate a private key and public key pair So kind of take away the technical language of that Basically generates a generator of wallets right Based on some private key, some key that you own, And so you can always spin up more addresses on the blockchain from that like private key that you have, like control all the different addresses, But you don't necessarily need to have multiple different browsers or multiple different extensions to get different wallets. The actual MetaMask itself plugin can create more for you, But for the general consumer they literally just like have they only think of that.

Rudy:

They only have one wallet in the MetaMask, which is pretty simple and pretty easy to understand to start, yeah, and now, once I move my Ethereum to MetaMask because it doesn't work with Bitcoin, right, it's just, you need a separate wallet for that one.

Sheldon:

Yeah, because there's separate blockchains, altogether right. So Bitcoin the blockchain has Bitcoin the asset, like the actual token that's moving on the Bitcoin blockchain, that's used in the Bitcoin blockchain to pay for gas or do things on the Bitcoin blockchain. And Ethereum, which is another blockchain, completely separate system that has Ethereum and also has the ability to program and create more tokens and more assets. So if you think of like other assets that you've heard of, they're most likely on the Ethereum blockchain and not the actual Bitcoin blockchain, because Bitcoin does not have smart contracts which enable you to actually create more tokens and other more complex as finished instruments.

Rudy:

Gotcha. All right, that makes sense. Yeah, obviously two different credit cards don't really work together either, so like yeah, like master card, visa. They don't really share that much information. You have to kind of use master card or visa. If it's accepted there, then it's accepted. If it's not, it's not.

Sheldon:

All right.

Rudy:

So I got a theory. I'm on coin base, i bought it there. I haven't met a mask, while it now has generated my private key or my public key. That's what I send it to And I send some Ethereum on it, and now I'm like all right, i want to buy an FT that my friend made because I just like their artwork and they have it hosted on open C, but it's asking me to like confirm using open C, even though my wallet is already connected to open C. That's kind of confusing. So why is there so many steps?

Sheldon:

Yeah, So to give a bit of context to people who don't know, so, open C itself is a NFT marketplace, right? So for people who are creating different types of digital collectibles, they can put it on this marketplace, kind of like an eBay or Amazon, where you can put like a storefront. You can sell your entities there. And so for your friend who basically created the NFT, he created a 10,000 collection of whatever he let's say koala bears right, he can put those koala bears up for sale on that storefront. And for you who's coming in to actually use it, you have your meta mask shiny new meta messages downloaded from the Google Play store on your Android or iOS store. You went to his, his um open C website storefront and you quit on the actual um NFTs you want to buy.

Sheldon:

What's going to happen there is that you have to do two things. One is approve um from open C itself to actually uh move the assets for you. So basically they have to be like allowed to say, hey, i could take money from your meta mask wallet and give you the NFT. And the second thing is actually you have to um then approve for, uh, the actual transaction itself to go through. So the first part of it is just giving permission for open C to say, hey, we're allowed to transact with you and, like, move the money for you. And the second thing is actually moving the assets itself. So like, if you want to buy the koala bear for um and ETH, right, You can send the ETH to court base or to open C, and then they send you the asset, the NFT, back to you. Okay, that makes sense.

Rudy:

And then there's a lot of steps in there I was pretty happy with you It's a lot of steps, but it's kind of yeah, yeah. And so because I always see like um people trying to be cautious of websites or fake domains or fake open. C websites because of that part where you said that I have to approve and allow open C to interact with my wallet. Yeah, Meta mask wallet, Yeah. So what happens if I connected to like a malicious site, like some you know fake website that pretended to be open C?

Sheldon:

Yeah, i mean.

Sheldon:

So what happened back in like 2021 is when there's a huge like NFT craze and a lot of people are trading different entities.

Sheldon:

Um, there's a lot of like fake websites that came out to basically scam people, right, and so what the scam kind of attack vector was is that they they created a website that looked just like open C or just like a common entity marketplace, and people who were unsuspecting they approved for their wallet to be connected to that website And they approved that website to basically move all their assets, right, move everything that I own in my actual meta mask wallet And for someone who doesn't actually know what's going on, they basically just signed away all of the assets, all the things that they're saved in that meta mask wallet. It's not the actual malicious actor can basically take control of all the assets, which is a bad thing in the business, because these experience pretty bad right now. Um, but like that's improving, that's getting better, like the actual verification of things are getting a lot better And like that's a lot. It's a bit harder now to do that, but it's still fairly common That's how it is to say That makes me think about it.

Rudy:

So it sounds like I shouldn't put all my funds into like a different wallet, that I am planning to interact with these different protocols.

Sheldon:

Yeah. so for pretty like ones that you're, you believe in a lot, like you trust, like, for example, an open sea or Coinbase, or like EtherScan is also another place where people approve, typically, people tend to be okay with approving on their main wallet, but for places that you've haven't heard of or they're new, they just came out, there's a hot entity collection that came out on Twitter. People should basically set up a different wallet they have in their Metamask extension or mobile up and use that as like a test case, just to be safe, just because you don't you never really know what you're interacting with, and so you never want to be in a situation where, like you, use your main one and, like you, approve it and and get caught up in the scan just kind of like good practices that people have in their downtime.

Rudy:

It sounds scary than it really is. I feel like, because, for sure, like anything else, has a lot going on the back end of any internet interaction that you do. Yeah, user experience just made it much easier, and I think, like that's what you're working on is making user experience easy for people to interact with, like lending, so like Uniswap is a great place that has a decentralized exchange where you can interact with anything that's available in Ethereum. Yeah, but that's also a one that's also something where you have to take a step into allowing to use your wallet with, and then you can use your wallet and Uniswap to swap out Ethereum with any other token.

Sheldon:

Yeah, i don't sound like a doomer because it makes it seems like we're like bashing all the user experience of it all, but like, at the end of the day, like there are certain like new things that people tend to like need to pick up as they're getting involved in the purpose space, and so I think it's good just like at least highlight some of the ways that people have been scammed before and actually like here's where you're just saying this is safety 101.

Rudy:

This is the most important thing. It's a money we don't have. We don't have a. I mean, we have a good way of keeping our funds safe nowadays, but what is a safety 101? because, yeah, i see scams all the time.

Sheldon:

Yeah, yeah. I mean, like the first and foremost is that, like I'd say, double, triple, check the places that you're interacting with.

Sheldon:

like, make sure you look at the actual user, the address, make sure that's a, that's something that you recognize and it's not like something you haven't heard of before, just because, like also common thing that people do is that they would again in the same case where they're creating fake websites of another platform. They also try to create different Twitter accounts that makes it look like you're coming from the real one, and they post the links there of, like, their fake site. And so definitely make sure, if you're finding things on Twitter, to be much more cautious, as you're not kind of random stuff.

Rudy:

It's like one of the if you have anyone's, i guess if anyone's been in their corporate company lately. It's like those training seminars they make you do like make sure you watch out for phishing emails. If you get an email from the CEO asking for your personal number or they have a favor for you to do, it's most likely a scam.

Rudy:

So yeah it's pretty like. It's just like that, folks. It's like what you pretty much learn to hit work as like a safety seminar. It's actually very similar idea of crypto. Just be careful what you're looking at. Make sure the URL is legitimate. Don't trust the internet. Plainly, you have to make sure it's for the correct source. That's like a general rule of thumb Don't ever just trust it.

Sheldon:

Yeah, just pick a random link. Yeah, don't ever do, But I think it's like I don't even type in, I don't even fully type in.

Rudy:

URLs in the search I search for things like I search for Twitter. I search for Twitter to go on Twitter. I'm like why am I doing? this I know it's twittercom, but I don't know why I'm searching for it to click like it.

Sheldon:

I may just matter about user experience. At the end of the day, it is like income on developers and the people who are building in the space to make this whole thing easier, and that's definitely getting better. Again the case of sugarcane, for example, defy itself and access in different financial products across the crypto ecosystem. It's still pretty clunky, right. You have to go to the app's website. You have to basically connect your MetaMask to a new website every single time. You have to even figure out their own unique interactions there And what you see with like, for example, like RobbHood.

Sheldon:

Right, they made that whole user experience of accessing options or stocks or ETFs very easy And that's what brought a whole new people who didn't have access to options or stock trading in a simple interface, and so that's kind of things we're trying to do for crypto. Right, there's a whole bunch of different defy ecosystem applications. How do we then bring kind of uniform, standardized interface and interaction with those different products? You don't have to reconnect every single time and also have the keys and like the actual assets to just store, kind of monitored for you, so you get text message alerts. That's also massive. That's currently in the crypto space, but I've been able to notify you if something changes or make the whole interface interactions easier. But again, like that'll just like. Those interactions are things we're building at sugarcane. I think we'll come to a lot of other parts in the ecosystem.

Rudy:

Yeah, that's like the thing too is when you connect to so many different protocols open C, uniswap, like in Matcha, is another one and yeah, kind of never ends. If you want to interact with a different token, that's how you do it. What happens if one of those projects or tokens get hacked? How do we know the smart contract that we're interacting with is safe, and if it becomes attacked, what happens to our funds? Is that safe?

Sheldon:

Yeah, i mean again to get in like a do-more-sense, like in anything that you're interacting with. There is a risk there, but I do believe that people will not need to actually ever think about smart contracts going forward. The general consumer doesn't need to actually have to look at this 40 character hexadecimal number. I have to think about my addresses, i think about my chains, i think about all these gas. The reality is that, while those are nice to be at the base level, i just don't think the general consumer doesn't actually care about that. So I think the safety is also going to rise too. Right, you have to actually start having like insurance funds or insurance that is able to back up your assets in the event of a hack, but right now that's not something that people actually currently have access to.

Rudy:

Yeah, it sounds like there's a lot of exciting development going on And, like also I've been noticing two different wallets. They actually have like transaction limits, so say, if you have, i don't know 10 ETH in a wallet, you can actually limit the smart contract to only allow an interaction with 0.1 ETH, if that's what you're using. Yeah, in that way, it's a good barrier to keep your funds safe while also having all your funds with your account.

Sheldon:

Yeah, i mean, i was talking about that one. In the case of actually, like your friend, created the entity collection and you're using OpenSea as an application to buy that. What typically happens in that interaction is that you unsuspectingly like a lot of people actually are aware of this they actually allow OpenSea to use and move all other assets, like all other ETH that they have. But what technically can happen is that you can actually set specific amounts. Right, i can say if this NFT is costing, let's say, 1 ETH, it's very expensive entity. But let's say that's the case, it costs 1 ETH, i can limit it instead of saying I want to transact and have OpenSea have access to everything, i only want OpenSea to have access to 1 ETH. So now I'm protected in the case that OpenSea gets hacked, like it and that's it.

Sheldon:

Hopefully they don't, but like let's say they do you're only exposed For that 1 ETH you use to transact with entity and get your entity back.

Rudy:

Oh gotcha. Yeah, that makes sense And I guess for ease of use they allow full access, just so they don't have to keep reminding you or asking for. Yeah why transactions aren't working. But yeah, so I guess, to sum that up, for, like the Ethereum space of Yeah DeFi, nfts and different protocols working together and smart contracts interacting with each other, i know Bitcoin is like working its way there now, so if anyone's a Bitcoin fan, it's kind of getting there.

Rudy:

Bitcoin Maxis. I think There's like two sides One's like not into it, the other side's kind of into it. So I'm excited for the collaboration, but I know there's plenty of other blockchains, like Solano trying to do the same thing, and Polygon's kind of a mix between an EVM compatible chain, but also its own chain, which we'll go into later episodes everyone This is like we're slowly working our way up to like the progression of what it's like to interact with crypto.

Rudy:

And this is just step two, where we're like we're learning about how to even buy crypto and then what to do when you with it, when you buy, and how to stay safe in the DeFi crypto space of Ethereum. But yeah, like, show me there's anything else Finding transactions?

Rudy:

Yeah exactly So much more. But next week is going to be a fun one too, because we're going to go deep into what's happening technically in the back end and what's how's everything proved? But thank you again, sheldon, for explaining more stuff to me. I have another lot more questions next week.

Sheldon:

If anyone has questions, please let us know. If you have any questions, we'll do our best to explain it. See you.

Understanding Wallets and NFT Transactions
Safe Interactions and User Experience in Crypto
Exploring DeFi, NFTs, and Blockchain Collaboration