Blockchain is a relevantly new technology, and the rules that govern it are not fully developed.
(1) Don’t Use Cryptocurrency or Blockchains to Skirt the Law
The legality and the legal zoning of cryptocurrencies are still fluctuating in many places of the world. Consulting CPA and respective attorney will be crucial. It will then be money well spent and will keep you out of trouble.
The following are frequently asked questions:
Can I use cryptocurrency as a way to hide money? This idea is a dangerous one. Blockchains keep records of all transactions forever, so even of you think you came up with a clever way to hide some tokens, those looking for bad behavior have time to find it.
Can I use blockchains as a way to smuggle money out of my country? Many countries have limitations on the funds citizens can take out of the country. You don’t want to do this for the same reason as I just mentioned: Blockchains keep records of all transactions forever.
Can I use cryptocurrency to buy illicit goods? The answer is – you guessed it – no! Blockchains keep a trail of your actions forever!
Advice: Don’t do anything with cryptocurrency and blockchains that would be illegal to do with real money.
(2) Keep Your Contracts as Simple as Possible
Decentralized autonomous organizations (DAOs), smart contracts, and chaincode are all the rage at the moment. The promise of cutting administration and legal cost is very enticing to many corporations. A sometimes overlooked characteristic of this technology is that it is just code.
(3) Publish with Great Caution
The whole point of blockchains is that once data is put in, it’s hard to take it out. That means that what you put in will be around for a long time. If you publish encrypted sensitive information, you need to be okay with the fact that the encrypted data may one day be broken and what you published may be readable to anyone.
(4) Back Up, Back Up, Back Up Your Private Keys
Blockchains are very unforgiving creatures. They don’t care if you lost your private keys or passwords. Many crypto nerd has been laid bare and given up countless tokens to the great blockchain oceans – treasure that will never be recovered.
(5) Triple-Check the Address Before Sending Currency
Cryptocurrency has attracted a fair number of scoundrels, so be careful when you send money. As soon as the money is out of your wallet, it’s gone for ever, and there is no way to get it back. No chargebacks and you can’t call customer support. Your money is gone.