As cryptocurrencies continue to gain popularity, their smart contract technology has become more sophisticated, with many coins incorporating a blacklist function into their contracts. While blacklisting can be a useful tool in preventing fraud and illegal activity, it also raises challenges for the decentralization of cryptocurrencies.
Decentralization is one of the core tenets of cryptocurrencies, and it is what sets them apart from traditional financial systems. Cryptocurrencies operate on a decentralized network, with no central authority or intermediary controlling the system. This makes transactions faster, cheaper, and more secure than traditional financial systems, as there is no middleman to slow down the process or take a cut of the transaction.
However, decentralization also presents challenges when it comes to implementing blacklisting functions. Blacklisting allows a cryptocurrency network to prevent specific individuals or entities from accessing or using the currency. This can be useful in preventing fraud, scams, and other illegal activities.
The challenge, however, is how to implement blacklisting functions without compromising the decentralized nature of the cryptocurrency network. If a central authority or institution has the power to blacklist individuals or entities, they could use that power to censor or restrict access to the currency for political or ideological reasons. This could undermine the decentralization that is a key feature of cryptocurrencies and limit the freedom and privacy of users.
If our wallet address is affected by this blacklist function, then we cannot transfer and sell the token or coin, becoming a honeypot. Usually, scammers often blacklist wallet addresses that hold large amounts of tokens or coins (whales) so its act like all run in normally, but its not. The other scheme is after reaching a certain market cap, the scammer will blacklist all the wallet address and then they rug it.
Since most tokens or crypto currency coins are produced by anonymous, not certain institutions protected by law, this blacklist function should not exist in the token or coin smart contract, because it will end with the token or crypto at any time quickly or later it will be a scam and fraud.
So how do we know if the smart contract of a token or coin has a blacklist function? We can find out by opening the contents of the smart contract by pressing the ctr+f key or search for the following words: “blacklist”, “isbot”, “isfrontrunner”. If you found one word from that three, that smart contract is already have blacklist function.
Tokens or Coins that have a smart contract containing this blacklist function will no longer work when the smart contract has been completely renounced, but currently, many smart contracts that have been renounced turn out not to have been fully renounced because there are many loopholes that make it a fake renounce, which even the auditor sometimes cannot find the fake renounced loophole.
So for the security of our money and long-term investment, it would be better to stay away from tokens or coins that have this blacklist function.
How do you think about this blacklist function?
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FAQs
The Blacklist
This method operates straightforwardly: once an investor purchases the scam token, their wallet address is added to a blacklist. Subsequently, any attempt to sell the tokens from a blacklisted wallet is met with prevention by the token's sell function.
What happens when a crypto is blacklisted? ›
Blacklisting in cryptocurrencies is the process of identifying transactions that have been involved in financial crimes such as theft, money laundering, etc., and ”tainting” the coins involved those transactions (marking a coin to prevent it from traded elsewhere).
How do you know if it is a cryptocurrency scam or not? ›
How Can You Tell If Someone Is a Crypto Scammer? Legitimate businesses will not correspond with you via social networks or text messages. They also will not ask you for your private keys to help you with an action.
How do I make sure my crypto is not a scam? ›
Look for an up-to-date and credible fake cryptocurrency list to check for scams. Is it too good to be true: Companies that promise guaranteed returns or to make you rich overnight are likely to be scams. If something seems too good to be true, tread carefully.
What is the purpose and use of a blacklist? ›
The IP address blacklist is a network security tool used to block access to or from internet addresses that are deemed problematic. An IP address can wind up on a blacklist because it has hosted unacceptable content, such as p*rnography, or because it contains code that might be harmful or a virus that might spread.
Can you get your money back if you get scammed on crypto? ›
Did you pay with cryptocurrency? Cryptocurrency payments typically are not reversible. Once you pay with cryptocurrency, you can only get your money back if the person you paid sends it back. But contact the company you used to send the money and tell them it was a fraudulent transaction.
Will crypto refund the money? ›
For example, if you need to dispute a purchase, your credit card company has a process to help you get your money back. Cryptocurrencies typically do not come with any such protections. Cryptocurrency payments typically are not reversible.
Can you go to jail from crypto? ›
Cryptoassets were also seized in a case where 3 men sold counterfeit drugs on the dark web and accepted crypto as payment, amassing £750,000 in the process. They were jailed for more than 20 years between them.
Can a crypto scammer be traced? ›
Yes, it is possible to recover scammed cryptocurrency with legal action. However, it's essential to understand that crypto scam recovery services are not included in cryptocurrency tracing, which aims only to identify payment paths on the blockchain.
Can someone steal my crypto with my wallet address? ›
Q: Can someone steal my cryptocurrency if they have my wallet address? A: While it's unlikely someone can steal cryptocurrency with your wallet address alone, crypto wallets can be hacked through other means, such as phishing, malware, or social engineering tactics.
While getting a refund after losing money to scammers is possible, the outcome depends on factors like bank policy, the type of scam, the amount lost, and how quickly the scam was reported. According to US federal law, banks must reimburse you for unauthorized transactions.
How to catch crypto scammer? ›
Signs of a Cryptocurrency Scam
- Promises of Guaranteed Returns: One of the most common red flags of a cryptocurrency scam is the promise of guaranteed returns. ...
- Lack of Project Transparency: Legitimate cryptocurrency projects value transparency and provide detailed information about their team, technology, and roadmap.
Whitelisting is about prevention, not about reacting. People do blacklisting after they have found a problem, whitelisting stops everything except the allowed on the list.
Why do wallets get blacklisted? ›
Usually, scammers often blacklist wallet addresses that hold large amounts of tokens or coins (whales) so its act like all run in normally, but its not. The other scheme is after reaching a certain market cap, the scammer will blacklist all the wallet address and then they rug it.
What is token blacklisting? ›
A JWT blacklist/deny list is a list of tokens that should no longer grant access to your system. You can use a traditional database or cache to keep the list of the tokens, using an in-memory data cache like Redis is a better approach.
