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How Private Doxxing Can Prevent Scams

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Written by   343
5 months ago

I know that the stance I am taking in this article will be an unpopular one. Many people in SmartBCH believe that "if you got scammed in crypto, you should have done your research better" and "you should have only invested what you are willing to risk losing", because "crypto is permissionless" and "crypto is decentralized". Are scams the price we have to pay for decentralization? Is being scammed just an unavoidable part of the crypto experience?

I would argue that scams are easily avoidable.

Yes, crypto is decentralized and permissionless, but the only reason for that is censorship resistance. I can understand that people are worried when the developers of a DEX are doxxed. They could be pressured into doing something that they don't want to do.

However, for new DEXs private doxxings have been demanded ever since BeachSwap scammed the SmartBCH community. And strangely enough for NFTs nobody asks for private doxxing. What's the risk for an artist if their identity was revealed? Will the government force the artist to draw pictures they don't want to draw?

As I will argue later in this article, the potential damage to the SmartBCH community from scammy or abandoned NFT projects can be just as devastating as the BeachSwap scam was.

DeFi for everybody

An additional point for private doxxing is that SmartBCH aspires to be "DeFi for the entire world" - not just the tech-savvy elite. So please, get off your high horse and join me in thinking about how the SmartBCH community can effectively prevent scams from happening. After all, we all would prefer if SmartBCH didn't become the next Binance Scam Chain. Right?

What is a private dox?

Private doxxing means that a reputable member of the BCH community gets to know the real identity of the project developers. That could be accomplished by having a video call in which the developers of a DEX, a token or an NFT project shows an identification card. The trusted member of the BCH community then stores that information in a secure way.

Anonymous until proven guilty

This information has to be kept private unless the doxxed person turns out to be a scammer. Then the information is to be released to the public to avoid future scams by the same scammer.

How can the information be stored in a secure way?

Easy. We all know how to store our private keys in a safe and secure way so that nobody gets access to them. Treat the identification information in the exact same way.

How can private doxxing prevent scams?

The goal of a private doxxing is to prevent scams and to increase the accountability for project developers who promised a lot and delivered very little. At the same time a private doxxing aims at preserving the developers' anonymity for as long as they prove to run a legitimate project.

Once the developer has earned a sufficient reputation, the BCH community may decide to destroy the identity information and in that way the developer will remain anonymous indefinitely.

To further illustrate how a private doxxing can help to prevent scams, let's go into more details.

What is the burden to just abandon a DEX, a token or an NFT project?

The burden is in most cases to just delete a Telegram account and to create a new one. It is actually quite low. Especially if the developer appeared out of nowhere - meaning he hasn't built up any reputation within the BCH community to speak of - they could disappear just as quickly as they appeared.

If a project developer's identity is known by a trusted member of the BCH community, then the burden to abandon the project is immensely higher than just deleting the Telegram account and creating a new one.

The next time this developer appears with a new project, their identity will already be known as having abandoned a project before. The person who does the private doxxing after the developer reappeared with a new project will check the "database of previous scams and unreliable developers" and they will realize that they may be dealing with a repeat offender. This can serve as a red flag to new investors.

Have we learned from BeachSwap?

The biggest scam on SmartBCH was without a doubt BeachSwap. An anonymous developer appeared out of nowhere and within a few days he launched a new DEX, held a presale, ran the scam DEX for a day and then disappeared with approximately 200 BCH.

The damage to the community was immense. Not only did it cost several people a lot of money - BeachSwap changed the attitude of the community towards DEXs significantly and permanently. Even though there hasn't been a second DEX scam as of now, the BCH community has become very protective when it comes to new DEXs. Each new DEX is scrutinized immensely. However, new NFT projects get a pass - even when the potential damage to the community is on a comparable level. And when people buy the NFTs for a staking use case and not just for the art, they have been scammed in case that staking use case never gets released.

How did the BCH community react to the BeachSwap scam?

A bounty of about 50 BCH was initiated for doxxing the BeachSwap scammer. After the scam happened most people wished there had been a private doxxing.

Had we had a private doxxing, the identity of the scammer would have been public knowledge and not only would that prevent that scammer from ever scamming any SmartBCH user in the future, the victims could act as they see fit to let the scammer know what they think of his actions. They could do so in a decentralized and permissionless way. And admit it - you love that thought, too, don't you?

Private doxxing for NFT projects

So in a time where an anonymous developer appears out of nowhere with an NFT project that can be set up in a few days and who may take in 200 BCH in minting fees, who promises future airdrops of additional NFTs and NFT staking rewards - as that person could disappear as quickly as they appeared and take as much money with them as the BeachSwap scammer, then I'd argue we need private doxxing - also for NFT projects that promise more than just pictures. In the end, the investors are not just paying for the "art", they are also buying the roadmap and the promise that the developer will work on implementing said roadmap. If the NFT project developer disappeared with 200 BCH from the community, the damage would be just as big as the BeachSwap scam.

Scam me once, shame on you.

Scam me twice, shame on me.

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Written by   343
5 months ago
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You're kidding right? Anonymous until proven guilty? Private doxxing by "reputable members of the community"? Have you heard about government organisations who's full time job it is to keep confidential information confidential failing to keep that confidential information confidential?

And who gets to decide who is that reputable member of the community: What if some or all those who get a vote in that are disreputable?

let me ask you this: Why do you think doxxing is ILLEGAL?

I couldn't disagree with you more my friend.

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5 months ago

First of all, let me thank you for actually having read the article and for using arguments rather than name-calling in your comment. By the way, I'm not being sarcastic in any way. I truly appreciate that and would like to discuss this further.

You are right, perfect secrecy does not exist. However, we all are capable of keeping our seed phrases secret, right? Otherwise, crypto would not work.

I'm not an expert when it comes to law, but I do believe that doxxing is only illegal if it is done against the will of the person being doxxed. If they agreed in a legal contract that includes them being doxxed in case of a scam, then I do believe that it should be fine. But maybe I'm wrong.

And who gets to decide who is that reputable member of the community: What if some or all those who get a vote in that are disreputable?

That is a very good point. My article was meant as a brain teaser. I don't have the solution thought out. I hope one can be found.

Again, thank you for your comment. I appreciate other points of view, especially if they are presented in a matter of fact way (without name-calling etc.).

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5 months ago

Hey, no problem. Open discussion with respect is always good. Even if we end up agreeing we don't agree.

I think we both have a different definition of doxxing. It's a criminal act as it exposes someone's identity and location to the public. The consequences can not be known to be benign therefore as the public may be individuals or groups with malicious intent towards the doxxed. Especially in your proposal, doxxing when fraud or scam has taken place, there will be many with malicious intent towards the doxxed. In that case, it is reckless endangerment at the minimum.

As far as a solution...

I think the locking of an initial amount of coins or other collateral helps. Also involving an independent 3rd party is a good security measure against rug pulls and the like.

Anyway thanks for your response, and civility!

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5 months ago

Thank you for your reply!

Yes, you are right. We use a different definition of doxxing. I use it as in "a mutually agreed upon part of a contract". The idea is that this measure would deter potential scammers, but they may end up using fake identification documents or even deep fake live video emulation and voice modulation to get around being identified.

Locking assets is definitely a good way to prevent rug pulls. I haven't quite understood how the suggestion with involving a third party works. Could you please give me some keywords?

And sorry for the late reply!

I really enjoy the exchange by the way.

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4 months ago