KYC: a passport to the crypto world

May 5th, 2024 at 18:30

The world of cryptocurrencies and blockchain, with all those DeFi, NFTs and dApps, may seem complicated and confusing. But in fact, behind many obscure words there are simple and useful things. Today, let's talk about one of them - KYC, or Know Your Customer.

🛂 KYC is like a passport in the world of cryptocurrencies. It's a process where cryptocurrency exchanges, dApps (decentralized apps) and other web3 organizations verify the identity of their users. Just like in normal life where we show our passport to get a bank account or buy an airplane ticket, in the crypto world KYC helps establish trust and protect all participants.

Why KYC is needed?

‼️ Imagine a large online marketplace where everyone walks around wearing masks. It's unclear who is the seller and who is the buyer. This is convenient for fraudsters, but dangerous for honest people. KYC helps to remove the masks and make the market transparent.

For example, a crypto exchange, by requiring KYC, can prevent money laundering, terrorist financing and other illegal activities. A dApp, by verifying the identity of its users, can protect its community from bots and scammers who try to manipulate the system.

Is KYC a good thing for the user?

✅ Yes, KYC is primarily a protection for the user themselves. By going through KYC, you are confirming that you are you and not someone else. This helps protect your funds from theft and fraud. KYC also allows projects to better understand their audience and offer better and safer services.

How does KYC protect against sybills and bots?

Sybills are fake accounts created by one person to gain some advantage in the system. Bots are automated programs that perform certain actions. 🤖 KYC helps to fight sybills and bots as it requires the user to verify their identity. One person can create many fake accounts, but it will be difficult to provide documents for each of them.

Is it dangerous to undergo KYC?

🛂 No, it is not dangerous to undergo KYC. Cryptocurrency exchanges and dApps that comply with the rules use modern technology to protect user data. Moreover, many projects offer additional security measures such as two-factor authentication and data encryption. In conclusion, KYC is an important tool that makes the world of cryptocurrencies and web3 more secure and transparent. It is like a passport that opens doors to new opportunities and protects us from fraudsters and malicious actors.