Why Keeping Secrets Is Essential For Web3
I once let a stranger hold my cash-only wallet while I tied my laces in Paris. I cannot attribute my naiveté to the folly of youth as I had already spent three decades on this planet. As soon as I looked up, my new friend had gone, as had my croissant money for the month. Needless to say, I only wear slip-ons and flip flops now.
The promise of blockchain is that of a future in which ownership is democratized through decentralization. Individuals fully own their data and assets, without fear of seizure by a central authority. MetaMask is leading the way to this decentralized future. We want you to enjoy this unprecedented level of freedom and know how to protect your assets. After all, with great freedom comes great responsibility.
The funds in your crypto wallet are like cash. If you were to share your Secret Recovery Phrase (formerly known as “seed phrase”) with someone, you are essentially letting that person hold your cash-only wallet. Do not be shocked when your crypto assets are gone. It is an unfortunate fact of life that there are thieves in this world. The anonymity afforded by blockchain technology further emboldens these thieves to concoct elaborate schemes through which they can extricate hapless users’ Secret Recovery Phrase.
Some of our users have unfortunately fallen prey to unscrupulous scammers, had their crypto assets stolen, and come to us for help. We are writing this article to help you understand why the very nature of a decentralized internet prevents MetaMask, or anyone, from helping you retrieve your funds after they have been stolen. The upshot is that if you never share your Secret Recovery Phrase with anyone else, your assets will be safe from scammers. It’s that simple.
Take a deep breath and read on to understand why personal responsibility is critical to decentralization, and why decentralization is a pillar of the MetaMask experience.
What is decentralization? Why does it require me to be more responsible?
You need to know what decentralization is because understanding the essence of our goal here at MetaMask, which is to bring about a decentralized Web 3.0, will help you be an informed user. Informed users are cautious users, and cautious users are in for a great journey through Web 3.0.
In centralized finance (CeFi), there is a central authority (your bank, the Central Bank, the government) in charge of things. This is mainstream finance, what we have now. This central authority can intervene in the market and seize assets at any time.
In stark contrast, decentralized finance (DeFi) eliminates the need for a central authority and intermediaries (traders, brokers, wealth managers, etc). MetaMask will never hand over your wallet to a government entity nor will it ever freeze your wallet like Robinhood did this past spring by restricting users’ GameStop equity. By not relying on a central authority, and effectively eliminating gatekeeping, MetaMask opens up a whole new world of finance to anyone with an internet connection. In DeFi, you are not required to share your personal identity, data, or custody of your assets with a central authority, because there is none. However, in return for this high degree of independence, you must be fully aware of the implications of bearing full responsibility for the security of your assets.
As a decentralized wallet, MetaMask has no central authority to which you can appeal for help. It is a non-custodial wallet: you own your funds as long as you have access to them with your Secret Recovery Phrase. Sharing your Secret Recovery Phrase is like handing over your cash-only wallet to a stranger (remember Paris?) or giving them the PIN code to your debit card. Forgetting your Secret Recovery Phrase is like losing your cash-only wallet while kayaking along a piranha-infested part of the Amazon river – it’s somewhere in there, but the chances of finding it are slim to none. In other words, don’t forget or share your Secret Recovery Phrase. (Here are some best practices for setting up password managers, writing down in multiple places, and even methods for memorizing your Secret Recovery Phrase).
What is Web 3.0? How is it different from Web 2.0?
All those benefits of decentralization come with some responsibility: You get to choose the type of security your account gets. MetaMask comes with support for recovery by the secret recovery phrase, and also allows holding your keys on a hardware wallet for added security, and we’re eagerly working on adding more backup strategies for more kinds of people soon.
Web 2.0 is what we have now – access to all the information and services you can fathom…in exchange for your data. For instance, social media companies act as central authorities who censor content and restrict access to their platforms, like a weird old digital country club with lots and lots of ads everywhere.
In contrast, Web 3.0 offers users an experience with no censors, no restrictions to access, and as much anonymity as the user desires (from complete to none). Imagine an internet where you don’t have to surrender your name and personal details every time you pay for something!
Web 3.0 empowers its users. You can put your assets to work in ways that are simply not possible in traditional finance (yield farming, flash loans, etc). You can create art and sell it, all without an art dealer pocketing huge fees (NFTs). You can even create your own decentralized app (dApp) and put it out there for the world to use. All without censorship or gatekeeping.
How can I be a responsible Web 3.0 user?
A good rule to follow in both CeFi and DeFi is that you should never, ever invest money you are not willing to lose. Do not invest all of your savings in crypto; ONLY invest whatever you can afford to lose. Always do your research before buying crypto assets.
As we’ve tried to explain throughout this piece, MetaMask is like a wallet in your pocket. It’s called a “hot wallet” in crypto parlance. What’s more secure than your pocket? A safe. A “cold wallet” like Ledger or Trezor on the other hand (which you can connect to MetaMask!) is more like keeping your crypto locked in a safe. It’s far more secure since it is not connected to the internet, and also adds more security features like confirming transactions on the hardware wallet itself.
Remember that sharing your Secret Recovery Phrase is more reckless than letting a complete stranger in a strange place hold your cash. With the latter scenario, you may get some assistance from law enforcement or even witnesses. When you share your Secret Recovery Phrase, your thieves cannot be traced, they cannot be caught, and they cannot be brought to justice.
MetaMask will take you on a glorious adventure into Web 3.0. All that we ask is you come prepared, alert, and excited. We will always do our part to warn you and advise you. Please do your part by following our advice: never share or forget your Secret Recovery Phrase.
Are you ready to embark on your journey through Web 3.0?